RD Instruction 2033-A
Table of Contents
Page 1
(Revision 1)

PART 2033 - RECORDS

Subpart A - Records Management In Rural Development Field Offices

TABLE OF CONTENTS

Sec.		Page

2033.1	Purpose.	1
2033.2	[Reserved]	1
2033.3	Authority and responsibility.	1

	(a)  Authority.	1
	(b)  Responsibility.	1

2033.4	Definitions.	1
2033.5	Types of records.	4

	(a)  Official records.	4
	(b)  Unofficial records/nonrecord material.	6
	(c)  Electronic records.	6

2033.6	Records filing and maintenance requirements.	9

	(a)  Filing.	9
	(b)  Filing equipment.	10
	(c)  File maintenance.	10

2033.7	Program case folders (applicant/borrower).	15

	(a)  Applications/preapplications.	15
	(b)  Conditional commitment applications.	16
	(c)  Loan docket folder.	17

2033.8	Maintenance of active borrower case folders.	17

	(a)  Arrangement of materials within folders.	17
	(b)  Maintenance of borrower case folders requiring
	     "special handling."	23

2033.9	Removal of material from "active" borrower
	case folders (individual and association).	29

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RD Instruction 2033-A
Table of Contents 
Page 2
(Revision 1)

Sec.		Page

2033.10	Closed borrower case folders.	30

	(a)  Determining "closed" borrower case folders.	30
	(b)  Maintenance and disposition of "closed" borrower
	     case folders.	31

2033.11	Section 504 housing assistance borrowers.	33

	(a)  Section 504 borrower list.	33
	(b)  Maintenance and disposition.	33

2033.12	Destroying official record material.	34
2033.13	Authority for disposition of Rural Development records.	34
2033.14	- 2033.50  [Reserved]	34

Exhibit A	- [RESERVED]

Exhibit B	- TABLE OF CONTENTS FOR ASSOCIATION - TYPE BORROWER CASE
	  FILES

Exhibit C	- MAINTENANCE OF PROGRAM RECORDS ENTERED TO THE AUTOMATED 
	  DISCREPANCY PROCESSING SYSTEM (ADPS)

oOo

RD Instruction 2033-A

PART 2033 - RECORDS

Subpart A - Records Management in Rural Development Field Offices

2033.1  Purpose.

	This Instruction prescribes the policies, procedures, and methods for maintaining and managing Rural Development, formerly Farmers Home Administration (RD), records in State, District, and County Offices.  The use of the Rural Development Operational Records Manual is mandatory and should be used in conjunction with this Instruction.

2033.2  [Reserved]

2033.3  Authority and responsibility.  

(a)  Authority.  Federal regulations require Rural Development to make and preserve records containing adequate and proper documentation of the organization, functions, policies, decisions, procedures, and essential transactions of the Agency, and are designed to furnish the information necessary to protect the legal and financial rights of the Government and persons directly affected by Rural Development activities.

(b)  Responsibility.  State Directors, District Directors, and County Supervisors are responsible for maintaining adequate documentation of all official transactions including those shown in Attachments 1 and 2 of Exhibit C of this Instruction.  Chiefs of Administrative Programs (CAPs)/Administrative Officers (AOs) are responsible for training office staffs in the application of this Instruction and for a continuing review of records management activities in offices within their State.  They are also responsible for keeping the State Director, District Director, and County Supervisor advised on records management problems and, when circumstances warrant, contacting the National Office, Support Services Division (SSD), General Services Branch (GSB) for clarification, correction, or necessary additions to this Instruction.  The National Office, Records Unit will conduct periodic reviews to ensure implementation of the requirements of this Instruction.  

2033.4  Definitions.

Applicant.  Any person or legally recognized group of persons or other legal entity seeking Rural Development program assistance through written applications, for certain subsequent loans, or by oral request.

__________________________________________________________________________
DISTRIBUTION:  WSAL                                Administrative Services
                                                     Records

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RD Instruction 2033-A
2033.4 (Con.)

Association borrower.  Associations, organizations, cooperations 
(co-ops), municipalities, water districts, authorities, or any other legal entity not eligible as an individual person for Rural Development program assistance, and all Business and Industry (B&I) borrowers (including individual) and Multi-Family Housing (MFH) borrowers who executed a loan agreement.

Block.  One or more chronological segments of cutoff, or closed, records that are in the same series and are dealt with as a unit for disposition purposes.

Case folder.  The one or more file folders, envelope jackets, mailing tubes, or other filing devices containing the total cumulative official records concerning an applicant/borrower.

(1)  The "initial" case folder contains the records needed for routine servicing of borrower accounts.

(2)  A "continuation" case folder is an additional folder begun when necessary to hold infrequently used records or to provide for an increased volume of material.

Closed case folder.  The one or more folders on a borrower who is classified as "paid up" or "otherwise satisfied" and no longer has an obligation to, or unresolved legal action pending with, Rural Development.

Disposal authority.  Legal approval empowering an Agency to transfer permanent records to the National Archives or carry-out the disposal of temporary records.

Electronic records.  Any record that is created, used, maintained, transmitted, and disposed of in electronic form.  Such records may be stored in computer memory (random access memory) or flexible disks.  Offices may or may not have nonrecord paper copies of electronic records.  Electronic records are also referred to as machine-readable records because they require machine processing for conversion to human-readable form.  Examples of these types of records include those on magnetic tapes, disks and drums, video files, optical disks, and floppy disks.

Essential Rural Development records.  Designated files or documents requiring special protective measures in the event of fire, flood, tornado, civil disorder, or other disruptive emergency situation.

Federal Records Center (FRC).  A facility for the low-cost storage and servicing of records pending their disposal or transfer to the National Archives. 

2

RD Instruction 2033-A
2033.4 (Con.)

File break/File cutoff.  Breaking or ending files at regular intervals, usually at the close of a fiscal or calendar year, to permit their disposal or transfer in complete blocks and for correspondence files, to permit the establishment of new files.

Individual borrower.  An individual person receiving Rural Development program assistance; EXCEPT those individuals receiving B&I program assistance or who executed an MFH loan agreement.

Nonrecord material.  Informational type material made or acquired for convenient reference purposes consisting of reader files; extra copies of documents; reference publications in the format of books, pamphlets, and factsheets; commercial advertising matter; rough drafts; personal papers; or any similar material maintained solely for the user's benefit.  

Office.  This means State, District, and County Offices.

Position filing.  A method of filing functionally related records in a predetermined position within a file folder.

Records.  Includes all books, papers, maps, photographs, machine-readable materials, or other documentary materials, regardless of physical form or characteristics, made or received by an agency of the United States Government under Federal law or in connection with the transaction of public business and preserved or appropriate for preservation by that agency or its legitimate successor as evidence of the organization, functions, policies, decisions, procedures, operations, or other activities of the Government or because of the informational value of data in them.  Library and museum material made or acquired and preserved solely for reference or exhibition purposes, extra copies of documents preserved only for convenience of reference, and stocks of publications and of processed documents are not included.

Records disposition.  Removal and destruction as wastepaper or by shredding, burning, or other suitable disposal methods of records exceeding established retention periods.  (Note:  Destruction methods must not compromise the confidentiality of information contained in the records.)

Records inventory.  The actual physical inventory measured in cubic foot volume, of ALL "official" records maintained in an office.

Retention period.  The legally established period of time which must elapse before a record is eligible for disposition.

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RD Instruction 2033-A
2033.4 (Con.)

Supervisor.  State Director, District Director, and County Supervisor.

Table of Contents/Processing Checklist.  These two items are used interchangeably and refer to an optionally designed State index form used in borrower case folders to assist in identifying the exact location of a specific record.

Temporary folder.  A substitute folder placed in the files during the prolonged absence of a regularly maintained case folder to hold records accumulated during the interim period.  (Note:  Temporary folders should be frequently reviewed to preclude the loss or misplacement of the official case folder.)

2033.5  Types of records.  

(a)  Official records.  For the purpose of this Instruction, the term "official record" means the "record copy" of all documentary material regardless of physical form or characteristics, prepared, received, or processed which indicates the policies, procedures, decisions, and essential transactions of an office in its conduct of Rural Development programs.  The requirement concerning the maintenance and disposition of procedural issuances are given in RD Instructions 2006-A and 2006-B.  Official records are divided into the following categories:

(1)  Program records.  Includes case folders on applicants and borrowers (Individual and Association) and "essential Rural Development records."

(i)  The "official" case folder for an applicant/borrower will be maintained by the office having primary responsibility for processing and; servicing a specific type of program assistance.  (e.g., State Offices normally administer B&I programs; District Offices administer MFH and Community Facilities (CF) programs; County Offices administer ALL other programs and usually serve as the initial contact point for persons seeking Rural Development program assistance.)  This requirement does not preclude the necessary programmatic interchange of case folders and information between the various office levels and Office of the General Counsel (OGC).  However, the responsible office supervisor shall ensure that the "official" case folder contains ALL information concerning an applicant/borrower.

4

RD Instruction 2033-A
2033.5(a)(1) (Con.)

(ii)  An "essential Rural Development record" 

(A)  Is the original of any document or record which provides evidence of indebtedness or obligation to Rural Development and includes, but is not limited to, the following items:

(1)  Original Promissory Notes.

(2)  Original Consolidation MFH Promissory Notes.

(3)  Original Renewal Promissory Notes.

(4)  Assumption Agreements.

(5)  Accelerated Repayment Agreements.

(6)  Grant Agreements.

(7)  Stock Certificates.

(8)  Charged-off Notes (see RD Instruction 1956-B 
or 1956-C).

(9)  Valuable Documents (see RD 
Instruction 2018-E).

(10)  Cost Voucher Documents (see RD
Instruction 2024-A). 

(11)  Subsidy Repayment Agreements.

(12)  Used and unused receipt books (Form 
RD 451-1, "Acknowledgment of Cash Payment").

(B)  These items require maximum protection at  all times and, will remain in a "locking-type" file cabinet except when in actual use.

(2)  Operational records.  Office files maintained under multi-digit file code subject headings, established by using the "1900 and 2000" series "Table of Contents" and contain official records material necessary for the functional management of general program, fiscal, personnel, and administrative operations.

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RD Instruction 2033-A
2033.5(a) (Con.)

(3)  Personnel records.  Official Personnel Folders (OPF) and associated material.  These folders are subject to Office of Personnel Management (OPM) regulations.  Instructions for filing, maintenance, and disposition of these records are contained in Federal Personnel Management Regulations, Department Personnel Management Regulations, and directives issued by the National Office, Human Resources (HR) as required.

(4)  Regulative records.  Regulative records contain rules, regulations, instructions, procedures, and similar directive type material issued by the National Office, State Office, Finance Office, National Finance Center, or other Federal, State, or local regulative source.  Procedures for filing, maintenance, and disposition of this type of material are usually contained within the specific publication.

(5)  Unnumbered letters.  Unnumbered letters will be used to provide general information to two or more Rural Development employees or offices.  These letters will not be used to establish, change, or modify authorized directives.  To provide uniformity in filing throughout the Agency, unnumbered letters will be filed by broad program areas in chronological order within a binder or folder.  The expiration date and category for filing will appear in the bottom left and bottom right corners of the first page, respectively.  The three categories are Housing Programs, Community/Business Programs, and Administrative/Others Programs.

(b)  Unofficial records/nonrecord material.  Information type material made or acquired for convenient reference purposes consisting of reader files; extra copies of documents; reference publications in the format of books, pamphlets, and factsheets; commercial advertising matter; rough drafts; personal papers; or any similar material maintained solely for the user's benefit.  Such material will not be made a part of the "official" files, and maintenance and disposition will be the option of the user.  

(c)  Electronic records.  Electronic records are subject to the same laws and regulations as paper records and will be maintained and disposed of in accordance with this Instruction, Departmental Regulations, and the National Archives and Records Administration (NARA) guidelines.

6

RD Instruction 2033-A
2033.5(c) (Con.)

(1)  Determining record material.  In determining record material, use the following criteria:

(i)  Is the record identified in the Agency records control schedule or other Agency regulations?

(ii)  Will the electronic copy serve as the official documentation of the transaction?

(iii)  If the answers to paragraphs (c)(1)(i) and (ii) of this section are yes, then the records should be properly identified and maintained in accordance with this Instruction.  It should be labeled with the file code, record name, brief description of the record, dates of origination, revision(s), and retention period to assure easy accessibility for future use of the file.  

(2)  Indexes.  Indexes will also be established in a manner which will allow the ready retrieval of the material whenever necessary throughout the authorized retention period.  The indexes will include the following:  

(i)  Name of organization unit responsible for the data.

(ii)  The file series.

(iii)  The time covered by the records.

(iv)  Name of the equipment used to create the record.

(3)  Nonrecord material associated with electronic records.  Guidelines will not be established for the retention of nonrecord material.  This material will be created solely for the purpose of convenience and reference, and will not be made a part of the official indexes.  Nonrecord material will be disposed of by the user when no longer needed for reference purposes.  They may include the following types of information:

(i)  Reader file copies of correspondence.

(ii)  Tickler, follow-up, or suspense copies of correspondence.

(iii)  Identical duplicate copies of all documents maintained in the same file.

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RD Instruction 2033-A
2033.5(c)(3) (Con.)

(iv)  Extra copies of printed or processed materials, official copies of which have been retained for record purposes.

(v)  Superseded manuals and other directives maintained outside the office that is responsible for retaining them.

(vi)  Materials documenting such fringe activities of agencies as employee welfare activities and charitable fund drives.

(vii)  Routing slips.

(viii)  Working papers.

(ix)  Drafts of reports and correspondence.

(x)  Transmittal sheets.

(xi)  Blank forms.

(xii)  Transcribed stenographic materials.

(xiii)  Correspondence and other records of short term value that, after action has been completed, have neither evidentiary nor informational value, such as requests for publications and communications on hotel reservations.

(xiv)  Information copies of correspondence and other papers on which no documented administrative action is taken.

(4)  Disposal of electronic records.  As with the paper version, electronic records must be disposed of in a timely manner.  Because of the relatively small space required to store electronic records, they are subject to be held longer than the authorized retention period.  However, because of legal ramifications, records eligible for disposition must be completely removed from the system.  They may be removed or disposed of by erasing or overwriting, not merely deleting the information from the system.  Electronic records MUST not be kept beyond the authorized retention periods.  Permanent electronic records will be maintained in accordance with the requirements of NARA regulations.  They will be converted to paper, microfilm, or other media approved by the Archivist of the United States for retiring purposes.  Such records, along with adequate documentation and adjunct files to permit access to them, will be transferred to the National Archives as soon as possible after it is determined that their purposes have been served.  For assistance in retiring electronic records, contact the National Office, SSD.

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RD Instruction 2033-A

2033.6  Records filing and maintenance requirements.

(a)  Filing.  Official records contain legal evidence of all transactions between Rural Development and the persons with which it conducts business.  Therefore, the following rules must be applied to filing operations:

(1)  Withholding documents or records from the official files is prohibited.  ANY exception to this policy requires National Office approval.

(2)  Removal or transfer of official records from Rural Development custody is prohibited except as expressly provided for in this Instruction, or in accordance with National Office approval obtained incident to a specific removal or transfer action.  (Note:  Records transmitted to OGC for programmatic review and approval are considered to be within Rural Development custody.)

(3)  Theft, falsification, mutilation, or unauthorized destruction of official records by Rural Development employees is punishable under public law.

(4)  Loss, theft, damage, or destruction of official records by fire, water, vandalism, civil disorder, or other disruptive situation will be immediately reported by telephone and by followup letter through the State Director to the National Office, for advice and guidance concerning the actions to be taken.

(5)  Oral or written information of a confidential nature that may come to an employee's knowledge must neither be revealed to nor discussed by any person except when the employee's official duties require dissemination.  This includes, but is not limited to, information obtained by employees from any source concerning the personal and financial affairs of applicants/borrowers, fellow employees, or other persons involved in Rural Development activities.

(6)  Procedures governing the availability of official records for public access and use are prescribed in RD Instructions 2015-E 
and 2018-F.  Office employees are expected to be familiar with the restrictions of RD Instructions 2015-E and 2018-F in order to avoid violation of procedures.  (Caution:  Records requested by the general public must be RETAINED until the request is fully processed even though the established retention requirements may have been met.)

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RD Instruction 2033-A
2033.6(a) (Con.)

(7)  The requirements for retention and destruction of official records prescribed in this Instruction are mandatory and will not be changed without prior National Office approval.

(b)  Filing equipment.  Procedures for ordering filing equipment are prescribed in RD Instruction 2024-C.  The various types of equipment and authorized use are specified below:

(1)  Filing cabinets.

(i)  Letter-size four or five drawer file cabinets will be used by County Offices for filing all official records.

(ii)  Legal-size four or five drawer file cabinets may be used by State and District Offices for filing "association-type" applicant/borrower case folders.

(iii)  Locking-type fire proof filing cabinets/safes will be used by offices for filing and protection of "essential Rural Development records" and other sensitive materials.

(2)  Open-shelf file units.

(i)  Three-shelf unit.  Offices may use this unit for Rural Development Procedure Manuals, continuation folders, closed borrower case folders, or any other purpose which best meets the need of the office.

(ii)  Five-shelf unit.  This unit may be used for storing and maintaining preprinted forms and similar materials.  Forms are normally stocked in numerical order; however, it is recommended that the most frequently used forms be placed on the more accessible shelves.

(3)  Map and plan files.  These units are available in 9- or 27-tube configurations and should be used for filing "as built plans," "project maps," "plot plans," or similar engineering type records.

(c)  File maintenance.  Office supervisors will establish and maintain files in locations most convenient to the primary users.  One or more persons should be delegated primary responsibility for daily maintenance of a given segment of files.  State Offices will prepare a State Supplement showing file codes, file station locations, and the person(s) responsible for a particular group of records.  New personnel should be adequately trained and become thoroughly familiar with all office activities prior to being assigned to filing operations.

10

RD Instruction 2033-A
2033.6(c) (Con.)

(1)  Alphabetical filing.  

(i)  File names of individuals by surname first, the given name next, and the middle name(s) or initial(s) last.  A dual surname, such as "Garcia-Valdex," should be filed by the first surname.

(ii)  File names of associations and organizations, including municipalities, as written in their legal or official title.  Words such as "the," "of," "for," or "and" should not be considered in determining correct file sequence.

(iii)  Consider names beginning with prefixes, such as "Mc," "O," or "Van" as one word and file alphabetically as written, beginning with the first letter.

(iv)  File abbreviations as though written in full.

(2)  Cross reference and chargeout.

(i)  Use Form RD 2033-1, "X-Reference Card," to indicate the exact file location of a folder when the label identification has been changed, such as a name change or when a folder is moved to another location.

(ii)  Use Form RD 2033-2, "Out Card," as a substitute for a folder whenever there is a need to record which office employee is using a specific folder.  When the folder is returned remove Form RD 2033-2 from the files.  Review "Out Cards" periodically to prevent loss or misplacement of the regular file.

(3)  Folder maintenance requirements.

(i)  Operational-files.  Use "right cut" four-position letter size folders for operational record files.  Material may be filed in these folders using "position filing," divider sheets to separate by fiscal year (FY) or office designation, or any other method to arrange material for ease in record usage and disposition.

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RD Instruction 2033-A
2033.6(c)(3) (Con.)

(ii)  Case folders.  Use right-tab letter size folders for all four-position and eight-position applicant/borrower case folders.  Use four-position folders for operating-type credit-only borrowers, and eight-position folders for real estate and organization-type borrowers.

(iii)  Continuation folders.  Use "continuation folders" to hold infrequently used documents or when the volume of material warrants separation from the "initial" folder.  When this is done, the "initial" folder is considered as the "1 of _____" folder, the first continuation folder as the "2 of _____" folder, and will continue on depending on the total number of folders.  Continuation folders may be filed as a separate series apart from the active files.

(iv)  Temporary folders.  Use a "temporary folder" to replace and accumulate material whenever it becomes necessary to remove a regularly maintained folder for an extended period of time, such as transmittal to the Regional Attorney, State Office, National Office, or other loan or servicing action.  Temporary folders should be frequently monitored to prevent loss or misplacement of the original folder.

(v)  Labeling.  Label each folder with sufficient information to adequately identify the folder contents.

(A)  Borrower case folder labels should include:  Name of the borrower, coborrower, case number, project number of MFH loans, borrower's classification of "active," "collection-only," or "judgement," program type, and folder continuation number when applicable.

(B)  Operational file folder labels should include:  alpha-numeric file code number and subject heading, and should also show Fiscal Year (FY), office, or other subdivision information.  Labels may be color-coded, preprinted, different sizes, or any combination thereof; to separate and identify various file segments by office, project, program, type of borrower, FY, or any manner which best serves office needs.  CAPs/AOs should encourage uniform labeling systems throughout each State.

12

RD Instruction 2033-A
 2033.6(c)(3) (Con.)

(vi)  Position filing.  Position filing within a folder is the segregated arranging of functionally related material in a predetermined folder position.  The "filing position" is the specific place where records are fastened within a folder.  The top inside left cover is designated as position "1;" the bottom inside left cover is position "2;" the top inside right cover, or the top of the insert leaf in eight-position folders, is position "3;" the remaining file positions "4" through "8" are designated by continuing this sequence. (Revised 08-23-06, 
PN 401.)

(vii)  Folder arrangement.  File folders may be arranged in any manner which best serves office needs.  (Note:  Different record series should be maintained as separate identifiable groups.)  For example:  Essential Rural Development records; OPFs; and other types of confidential information such as audit reports, employee investigations, and employee financial interest statements must be maintained in "locking-type" file cabinets.  Pending applications/preapplications should be separated from "active" borrower files.  Active borrower files should be separated from "closed" borrower files.  Closed borrower files, continuation folders, or other files, which are infrequently used, may be maintained in the less accessible file space and should be properly and adequately identified.  These folders may be filed in alphabetical order or further divided by program type, project, processing stage, District or County Office designation, or other means for control and identification purposes.

(viii)  Removal of records.  In order to maximize the use of filing space and equipment, records eligible for disposal, as prescribed in this Instruction, MUST be removed from all filing equipment.  Offices having access to additional storage space may transfer inactive or long term records to such space, providing these areas are frequently monitored to prevent excessive accumulation of unneeded material.  Supervisors responsible for official borrower case folders shall ensure that all participating offices are notified when disposition of official borrower case folders takes place, in order that the participating offices may dispose of related materials.

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(Revision 1)
(04-09-97)  PN 275

RD Instruction 2033-A
 2033.6(c)(3) (Con.)

(ix)  Transfer of records.  Records that are closed or inactive BUT must be maintained for regulatory or legal purposes, may be retired to the FRC.  However, the following retentions must be met before the records are eligible to be retired.  Financial records must be at least 3 FYs old.  Borrower case files labeled "Loss to the Government" must have a retention of 3 FYs following the FY in which the loan is closed, and contract files must be retained in the office 1 FY after the case is closed before retiring to the FRC.  States should coordinate the retiring process directly with the FRC serving their area.  The office having custody of the records is responsible for preparing the Standard Form (SF)-135, "Records Transmittal and Receipt," and preparing the records for transfer to the FRC.  (See Forms Manual Insert (FMI).)  The SF-135, SF-135A, "Records Transmittal and Receipt (Continuation)," and any attachments must be forwarded to the National Office, Records Officer, for prior approval before submitting to the FRC.  General preparation instructions are on the back of the form.  Preparation instructions are supplemented as follows:

(A)  Insert record group for Rural Development (96).

(B)  Insert disposal authorities for operational files (found in the last column, of the Operational Records Manual).

(C)  Insert disposal authority for borrower case folders (found in the Operational Records Manual).

(D)  Insert disposal date (calculate date from established retention period).

(x)  Retrieval of transferred records.  Transferred records may be retrieved from the FRC by submitting Optional Form (OF)-11 "Reference Request - Federal Records Centers."  (See FMI.)  Request for such records should be made through the State Office.  To readily identify a file retrieved from the FRC the office should flag the record or box of records to indicate such. 

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(Revision 1)

RD Instruction 2033-A

 2033.7  Program case folders (applicant/borrower).

	Each office shall establish and maintain an "official record" case folder, for each applicant/borrower receiving program assistance, for which the office has primary program processing and servicing responsibility. Because of the necessary and/or frequent interchange of applicant/borrower information between the various office levels, offices may establish duplicate applicant/borrower informational folders to accommodate certain kinds of record information.  Such folders, when established, must be clearly identified as "duplicate" case folders and contain the originating office's identification.  "Official record" folders must be filed as a separate series.

(a)  Applications/preapplications.

(1)  Pending applications.  File pending applications as a separate series in one or more A-Z sets of third-cut folders generally preceding the "active" borrowers' case folders.  Keep the application and related material together as a single assembly of papers.  Establish separate folders for individual applicants at the discretion of the office supervisor.  Establish separate folders for association applicants.  File pending applications as a single alphabetical group or subdivided by those program type, processing step, packager, project, district or county designation, or any combination thereof best serving office needs.  Maintain applications which have been rejected, withdrawn, canceled, or expired as prescribed in paragraph (a)(2) of this section.

(2)  Rejected, withdrawn, canceled, or expired applications.  Remove the application and related papers from the "pending" file series and maintain as follows:

(i)  Return such documents as plat maps, plans, specifications, engineering data, feasibility studies, etc., to the applicant, PROVIDED these documents are not needed as a basis for rejection.

(ii)  For applicants indebted to Rural Development (individual or association), file the "rejected" or "withdrawn" application and any remaining material in the existing borrower case folder.  Mark the face of the application "REJECTED or WITHDRAWN (date)."  If the application involved a "grant only" or "combination loan and grant," include the word "GRANT" when marking the application.  See  2033.10(b)(4)(iii) and (iv) of this Instruction for disposition of these case folders.

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(Revision 1)
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RD Instruction 2033-A
 2033.7(a)(2) (Con.)

(iii)  For applicants not indebted to Rural Development (individual or association), file "loan only" applications in a REJECTED, WITHDRAWN, CANCELED, or EXPIRED series A-Z file.  File "grant only" or "combination loan and grant" applications in a separate A-Z file series.  Dispose of these applications as follows:

(A)  Destroy individual "loan only" applications 2 FYs 
and 1 month after the end of the FY in which the application was rejected, withdrawn, canceled, or expired; or 1 FY after the end of the FY in which final action was taken on an application involving an appeal, investigation, or litigation, whichever is later.

(B)  Destroy individual "grant only," and "combination loan and grant" applications 3 FYs after the end of the FY in which the application was rejected, withdrawn, canceled, or expired; or 1 FY after the end of the FY in which final action was taken on an investigation or litigation, whichever is later.

(C)  Destroy association "loan only," "grant only," and "combination loan and grant" applications as prescribed for "individual" applications in paragraphs (a)(2)(iii)(A) and (B) of this section, EXCEPT when the same association makes more than one application.  In this event, retain actual applications until 2 FYs and 1 month after the end of the FY in which the last application was rejected.

(b)  Conditional commitment applications.  Documents accumulated in accordance with HB-1-3550 will be segregated into two categories and maintained as follows: (Revised 01-23-03, SPECIAL PN.)

(1)  Master file.  Establish a four-position folder under the name and address of the commitment applicant.  This folder 
will contain the records and information required by HB-1-3550.  A separate folder may be established for each project.  Records in these folders may be destroyed 2 FYs after the FY in which final action has been taken on all conditional commitments covered by the application. (Revised 01-23-03, SPECIAL PN.)

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(Revision 1)

RD Instruction 2033-A
2033.7(b) (Con.)

(2)  Individual dwelling folder.  Establish an eight-position folder for each dwelling covered by the commitment application.  Label this folder with the name of the commitment applicant and the address or block and lot number of the specific dwelling.  This folder will contain the required information supplied by the commitment applicant.  When a qualified applicant applies for a loan to purchase a home on which a conditional commitment has been issued, this folder becomes the applicant's borrower case folder with the label changed accordingly.

(3)  Return of documents.  If the commitment applicant's application is withdrawn or rejected; or the conditional commitment for any dwelling is not issued, is canceled, or expires; return the plans, specifications, and related materials concerning the dwelling and/or property to the commitment applicant.  Any remaining material will be kept in the commitment applicant's master folder.

(c)  Loan docket folder.  For loans that need to be submitted to the State Office for approval, fasten all forms and other documents in the designated positions, EXCEPT documents to be signed by the loan approving official and of documents to be submitted to the Finance Office.  The original and copy(ies) of documents to be signed in the State Office will be kept together in order for the name and title of the approving official to be typed thereon. (Revised 08-23-06, PN 401.)

2033.8  Maintenance of active borrower case folders.  

(a)  Arrangement of materials within folders.  Records are arranged within borrower case folders by using the "position filing" method, for the eight different categories of items or transactions.  Fasten material filed in case folders to the prescribed filing position using metal fasteners.  (Revised 08-23-06, PN 401.)

(1)  Use a "Table of Contents" or "Processing Checklist" as prescribed in Exhibit B of this Instruction in each "association-type" loan folder showing the location of each document.  Divider sheets (blank paper, with or without tabs) may be used within a filing position to separate specific types of records, or within a case folder to separate records accumulated for different borrowers.  When divider sheets are used to differentiate between borrowers, a brief statement of the former borrower's account status should be entered on the divider sheet.

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(Revision 1)
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RD Instruction 2033-A
2033.8(a) (Con.)

(2)  File all documents in the designated position EXCEPT when the volume, size, or unique subject matter requires separation for better maintenance purposes.  In these circumstances, place a divider sheet in the position where the material would normally be filed and identify the continuation folder, envelope jacket, mailing tube, or other area where the material is located.  Listed below, in paragraphs (i) through (viii) of this paragraph, are examples of files which may be maintained separately:

(i)  Appeal hearing file:  Containing tape recordings, hearing notes, transcripts, and associated appeal hearing information.

(ii)  Appraisal file:  Including plat maps, plans, photographs, bound reports, or similar material.

(iii)  Bond document files:  When Bond Counsel is used, as prescribed in RD Instruction 1942-A, 1942.19, bond transcript documents will be kept intact as received from Bond Counsel.  Correspondence to and from Bond Counsel will also be placed in this file.

(iv)  Construction and engineering file:  Containing plans, specifications, copies of contracts, engineering drawings, and similar construction information.

(v)  Feasibility studies:  Containing reports, statistical data, market studies, brochures, bound documents, and similar information.

(vi)  Litigation files:  For cases involving litigation, such as bankruptcy or other legal action which generate large volumes of evidentiary type material.

(vii)  Rights-of-way files:  When volume warrants, contain material establishing evidence or rights-of-way.  Documents, except Forms RD 442-21, "Right-of-Way Certificate," and 
RD 442-22, "Opinion of Counsel Relative to Rights-of-Way," may be returned to the borrower when all necessary permits have been obtained and recorded.

(viii)  Multi-Family Housing files:  Because of the volume associated with these files, separate eight-position folders will be established as follows and disposition conducted as shown below, in paragraphs (A) through (D) of this paragraph:

18
(Revision 1)

RD Instruction 2033-A
2033.8(a)(2)(viii) (Con.)

(A)  Loan File:  

Containing preapplication, application, and closing documents; assumption documents; consolidation documents; reamortization documents; prepayment documents, etc.

POSITION "1" - Processing checklists; security agreements; financing statements; lien searches.

POSITION "2" - Loan obligations documents; copies
of promissory notes, assumption agreements, and reamortization requests and agreements; interest credit and rental assistance requests and agreements; supervised bank accounts for other than construction; check requests and evidence of check receipts; consolidation forms.

POSITION "3" - Preapplication and application information; initial operating budget, utility allowance, management plan/agreement; running records up to the operational stage; District Director recommendation letter and State Office response; prepayment requests and supporting documentation.

POSITION "4" - Correspondence up to the date when the project is operational.

POSITION "5" - Organizational documents and regulations; options; real estate instrument; loan agreements; title information; mortgage title insurance; closing instructions and other closing records.

POSITION "6" - Construction information prior to start of construction.

POSITION "7" - Property insurance; position fidelity bonds.

POSITION "8" - Appraisal with all attachments; site information.

RETAIN UNTIL ACCOUNT IS SATISFIED.

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(04-09-97)  PN 275

RD Instruction 2033-A
2033.8(a)(2)(viii) (Con.)

(B)  Construction File:

Containing plans, specifications, bid documents, copies of contracts, partial pay estimates, supervised bank account information, cost information, cost certification, and similar construction information.

Monthly construction inspections.  RETAIN 3 YEARS AFTER FINAL INSPECTION AND THEN DESTROY.  THE FINAL INSPECTION WILL BE RETAINED UNTIL THE ACCOUNT IS SATISFIED.

Preliminary plans and specifications.  Return to borrower when final plans and specifications are approved.

Final plans and "as built" plans and specifications.  RETAIN 10 YEARS AFTER THE EXPIRATION OF BUILDERS WARRANTY.

Partial pay estimates.  RETAIN 3 YEARS AFTER COST CERTIFICATION IS ACCEPTED AND THEN DESTROY.

POSITION "1" - Interim lender letter; Deposit Agreement and supervised bank account records.

POSITION "2" - Partial pay estimates and pay requests; construction inspections; cost certification.

POSITION "3" - Change orders and running records.

POSITION "4" - Preconstruction conference report; construction contract; correspondence.

POSITIONS "5-8" - As needed for bid documents and continuation of material in Positions "1" through "4."

Material may be moved to position "6" of the "Loan File" when construction is 100 percent complete if material is not too bulky.

EXCEPT AS NOTED, RETAIN UNTIL ACCOUNT IS SATISFIED.

20

RD Instruction 2033-A
 2033.8(a)(2)(viii) (Con.)

(C)  Current Servicing File:  (Revised 02-24-05, SPECIAL PN.)

Containing copy of loan agreement and affirmative fair housing marketing plan; supervisory visit reports, compliance reviews, and site visits; budgets and utility allowances; annual reports, audits, and annual analyses; current management plan and management agreement; notice of evictions; correspondence and running records; problem case reports and corresponding correspondence.

Form RD 3560-7, "Multiple Family Housing Project Budget/Utility Allowance."  RETAIN A 3-YEAR HISTORY OF APPROVED BUDGETS.

Notice of evictions.  RETAIN 3 YEARS AFTER TENANT VACATES AND THEN DESTROY.

Supervisory visit reports, site visits, and compliance reviews.  RETAIN LAST THREE SUPERVISORY VISIT REPORTS, SITE VISITS, AND COMPLIANCE REVIEWS.

Annual reports, audits, and annual analysis.  RETAIN LAST THREE ANNUAL REPORTS, AUDITS, AND ANNUAL ANALYSIS.  RETAIN CURRENT AND PREVIOUS ENERGY AUDIT.

Note:  If an account is a problem case or an investigation or audit is in process, do not destroy material until problem is resolved or the investigation/audit is closed.

POSITION "1" - Copy of loan agreement; affirmative fair housing marketing plan; management plan; management agreement; financial statement; security agreement; project and pet rules.

POSITION "2" - If desired, a copy of promissory notes; assumption agreements; interest credit agreements; rental assistance agreements; reamortization agreements; consolidation forms; conversion to Pre-Amortization Schedule System (PASS) forms.

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(Revision 1)
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RD Instruction 2033-A
 2033.8(a)(2)(viii)(C) (Con.)

POSITION "3" - Running records.

POSITION "4" - Correspondence.

POSITION "5" - Annual reports; audits; year-end reports; energy audits; 2 percent Operation and Maintenance (O&M) return documentation; budget; utility allowance; rent change documentation.

POSITION "6" - Supervisory visit reports; compliance reviews; site visit reports. 

POSITION "7" - If desired, a copy of insurance policies.

POSITION "8" - Problem case information.

Material from the servicing file may be moved to a continuation folder until eligible for disposition when no longer applicable to current operations.

EXCEPT AS NOTED, RETAIN UNTIL ACCOUNT IS SATISFIED.

(D)  Monthly Report File:

Containing the Monthly Reports, Tenant Certifications, Project Worksheets, and correspondence dealing with the monthly reports.

Form RD 3560-8, "Tenant Certification."  RETAIN TENANT CERTIFICATION UNTIL 3 YEARS OLD AND THEN DESTROY.  (Revised 02-24-05, SPECIAL PN.)

Form RD 3560-29A, "Multiple Family Housing Statement of Payment Due."  RETAIN IN BATCH FORM AND DESTROY AFTER 30 DAYS IF NO APPEALS OR WAIVER OF LATE FEES.  
(Revised 02-24-05, SPECIAL PN.)

Form RD 3560-29, "Notice of Payment Due Report."  RETAIN A 3-YEAR HISTORY OF PROJECT WORKSHEETS.  (Revised 02-24-05, SPECIAL PN.)

M2A Screens:  RETAIN UNTIL THE PAYMENT HAS BEEN PROCESSED AND IS INCLUDED IN AUTOMATED MULTI-FAMILY ACCOUNTING SYSTEM (AMAS) HISTORY AND THEN DESTROY.

22
(Revision 1)

RD Instruction 2033-A
2033.8(a)(2)(viii)(D) (Con.)

POSITION "1" - Project worksheets and M2A screens. (Optional; may be batch retained until disposition.)

POSITION "2" - Tracking logs.

POSITION "3" - Running record.

POSITION "4" - Correspondence concerning project worksheets; payments; and tenant certifications.

POSITION "5" - Monthly Reports; letter waiving monthly reports; letter reinstating monthly reports.

POSITION "6" - Expired Tenant Certifications. (Optional; may be kept in binders for each project until disposition.)

POSITION "7" - Master tenant list.

POSITION "8" - Current Tenant Certifications. (Optional; may be kept in binders for each project until disposition.)

EXCEPT AS NOTED, RETAIN UNTIL ACCOUNT IS SATISFIED.

(b)  Maintenance of borrower case folders requiring "special handling."

(1)  Appeal cases.  For borrowers who have made an appeal, mark the face of the case folder "APPEALED (date)."  Destroy these folders 1 FY after the end of the FY in which the final action was taken on the appeal (provided the 25-month retention for rejected or withdrawn application has been met) or destroy 1 FY after the case folder is considered closed, whichever is later.  

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(04-09-97)  PN 275

RD Instruction 2033-A
2033.8(b) (Con.)

(2)  Assumption transaction.  In assumption transactions, establish a new folder for the "transferee" and place a Form RD 2033-1 under the "transferor's" name in the "active" case folder series.  Any needed loan servicing or legal documents, such as security instruments, title opinions, copies of notes, affidavits of borrower and seller, latest appraisal, etc., in the "transferor's" folder will be refiled in the "transferee's" folder.  Insert divider sheets where necessary.  Any remaining material in the transferor's file will be considered "closed" provided all Rural Development loan indebtedness has been satisfied.

(3)  Asset sales.  Label case folders for borrowers involved in the Asset Sale "FY_Asset Sale" and remove them to a separate location from the active files.  These files, even though considered "closed" will not be destroyed for a period of 2 FYs from the FY in which the borrower's loan(s) was sold or subsequently assigned during a loan substitution.  After the borrower's case folders are retained for a period of 2 FYs, the case folders are considered closed and, as they will have already met the retention period for "closed" borrower files are now eligible for disposition.  If a borrower case file is returned to Rural Development during the 
2-year retention period, the case file will be removed from the Asset Sale location and returned to "active" file status.

(4)  Collection-only or judgement.  In the event transferors of title by voluntary conveyance, assumption, or through foreclosure action are reclassified to collection-only or judgement, a new case folder for the transferor will be established for the final collection and/or settlement of indebtedness.  Only the essential account servicing material and pertinent correspondence will be transferred from previous folder(s).  A cross-reference to the transferee will be inserted in Position "3" of this new folder.

(5)  Litigation, claims, and information requests.  Case folder(s) for borrowers who are or may be involved in legal action, employee's fiscal liability action, Tort Claims, Freedom of Information or Privacy Act requests, will be marked "DO NOT DESTROY" on the face of the folder(s) at the time of notification by the State Director or National Office.  These records will be retained until notification is received from the State Director or National Office to remove the "DO NOT DESTROY" legend.

24

RD Instruction 2033-A
2033.8(b) (Con.)

(6)  Loss to the Government.

(i)  A borrower case file in which a financial loss to the Government occurred, will be screened at the time the case is closed, to determine if the loss can be used as a basis for the denial of future credit.  The following criteria will be used when screening the borrower case file and will be applied to all programs.

(A)  If the borrower acted in bad faith by not following agreements, approved financial plans, making unauthorized capital expenditures, and failure to carry out supervisory and/or financial management practices agreed to in writing.

(B)  If there has been an Office of the Inspector General (OIG) investigation or audit or an OGC opinion that clearly demonstrates the Agency experienced a loss due to misrepresentation, fraud, conversion, or criminal activities and it has been determined that the loss will not be recovered.

(C)  Poor financial and/or production management.

(D)  Poor credit history.

(ii)  If documents in the case file meet any of the criteria in paragraph (b)(6)(i) of this section, the file will be retained for a period of 7 FYs.  Those cases that have resulted in a loss to the Government but do not meet the criteria in paragraph (b)(6)(i) of this section, will be retained for a 3 FYs period and then destroyed.

(A)  Records to be retained specifically for Single Family Housing (SFH) loan programs include:

(1)  Copy of the most recent appraisal.

(2)  Copy of the OIG or audit report, if applicable.

(3)  Documentation reflecting full amount of the loan; i.e., Promissory Note or Form RD 1940-1, "Request for Obligation of Funds."

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(04-09-97)  PN 275 

RD Instruction 2033-A
2033.8(b)(6)(ii)(A) (Con.)

(4)  Form RD 1956-1, "Application for Settlement of Indebtedness," if applicable.

(5)  Printed copy of the Account Information (AI) screen as of the date of settlement, conveyance to Rural Development, or foreclosure.

(6)  Running case record documentation reflecting problem loan servicing and whether or not the loss was due to reasons beyond the borrower's control (such as economic conditions).

(B)  Records to be retained specifically for the B&I guaranteed and direct loan programs include:

(1)  Any final bankruptcy opinions and/or foreclosure documents.

(2)  Any OGC opinions pertinent to the situation.

(3)  Any security agreements, Uniform Commercial Code (UCC) filings.

(4)  Corporate financial statements for the last 3 years.

(5)  Credit reports.

(6)  Form RD 449-1, "Application for Loan and Guarantee."

(7)  Form RD 449-2, "Statement of Collateral," at inception of loan and a "Statement Regarding the Collateral" to be liquidated.

(8)  Form RD 449-4, "Statement of Personal History."

(9)  Form RD 449-29, "Project Summary -- Business and Industrial Loan Division."

(10)  Form RD 449-34, "Loan Note Guarantee."

(11)  Form RD 449-39, "Field Visit Review (Business and Industrial Loans)."

26

RD Instruction 2033-A
 2033.8(b)(6)(ii)(B) (Con.)

(12)  Form RD 3560-33 or RD 3560-34, Loan Agreement.  (Revised 02-24-05, SPECIAL PN.)

(13)  Form RD 1980-59, "Quarterly Delinquent/Problem Loan Report," for the last year of operation.

(14)  Front page of appraisal reports at loan inception and at the time of liquidation.

(15)  Lender's payment ledgers.

(16)  Personal financial statements of guarantors for the last 3 years.

(C)  Records to be retained specifically for the Community Programs (CP) guaranteed and direct loan programs include:

(1)  Any OGC opinions pertinent to the situation.

(2)  Copies of Guide 22 of RD Instruction 1942-A or other written evidence signed by the borrower which reflects failed agreements.

(3)  Copy of bond transcript or ordinance.

(4)  Correspondence reflecting problem loan servicing by Agency.

(5)  Documentation on appeals.

(6)  Final loss settlement checklist.

(7)  Final report of loss.

(8)  Form RD 1942-43, "Project Summary Community Facilities (Other Than Utility-Type Projects)," 
RD 1942-45, "Project Summary - Water and Waste Disposal and Other Utility Type Projects," or the Automated Community Facilities Project Summary (Revised 03-19-03, PN 357.)

(9)  Form RD 1956-1.

(10)  Grant agreement.

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(04-09-97)  PN 275

RD Instruction 2033-A
 2033.8(b)(6)(ii)(C) (Con.)

(11)  Lender's loan agreement.

(12)  OIG investigation or audit that clearly demonstrates misrepresentation, fraud, or criminal activities.

(13)  Problem/delinquent servicing reports for the last year of operation.

(14)  Running record reflecting problem loan servicing by Agency.

(15)  Specimen bond.

(16)  Unauthorized assistance determinations with related documentation.

(iii)  Guaranteed loan losses at this time are not significant in most County Offices, therefore, the entire guaranteed file should be maintained for either 3 or 7 years. 

(7)  MFH prepayment reports.  The loan files for prepaid loans will be considered "closed" and will be destroyed as noted in  2033.10 of this Instruction.  However, a file with the borrower's name, case number, project number, and the notation "PREPAID LOAN" will be kept through the expiration of the restricted use period and will contain the following:  prepayment request, prepayment report and supporting documentation, release of mortgage with the prepayment restrictions, if applicable, and any other documentation in reference to the prepayment and any subsequent actions. 

(8)  Property acquisition.  When property is taken into Government inventory, the former borrower's case folder(s) should be identified to reflect the acquisition action.  The case folder(s) may be continued in the "active" case folder series or relocated to a separate series for future processing and servicing activities as specified in RD Instruction 1955-B.  If the case folders are relocated, a "cross-reference" should be maintained in the "active" file series under the former borrower's name.  Acquired property case folders will be considered "closed" as prescribed in 
 2033.10(a)(3) of this Instruction. 

(i)  If acquired real estate is leased while in Government inventory, file the records on the lessee in the former borrower's initial case folder.  Insert divider sheets where required.  Enter the lessee's name in pencil on the folder label and establish Form RD 2033-1 under the lessee's name in the "active" case folder series.

28
(Revision 2)

RD Instruction 2033-A
 2033.8(b)(8) (Con.)

(ii)  If acquired real estate is sold for cash, relabel the former borrower's case folder(s) with the name of the purchaser.  Maintain the folder(s) in the "active" borrower series, under the purchaser's name, until the redemption period, if applicable, has expired.

(iii)  If acquired real estate is sold on credit basis, establish a new folder for the purchaser.  Material in Positions "6" and "8," and any other needed records in the former borrower's case folder(s), will be refiled in the purchaser's folder.  Until final payment is made, maintain Form RD 2033-1 under the former borrower's name in the "active" case folder series.

(iv)  If acquired real estate is sold as individual parcels, the former borrower's case folder(s) and the parcel purchaser's records will be maintained in a manner best serving the needs of the office. 

 2033.9  Removal of material from "active" borrower case folders (individual and association).

	Official record material should not be removed from an "active" borrower case folder and destroyed until the entire case folder is considered "closed" and becomes eligible for disposition, except as provided in 2033.8(a)(2)(viii) of this Instruction.  The increasing number of appeals, claims, audits, investigations, legal actions, and public information requests requires maintenance of all information concerning a borrower's account(s).  Through the proper use of "continuation folders" and by relocating such folders to the less active file space or other storage facilities, offices should be able to maintain and manage official record accumulations with a minimum of problems.  Offices incurring records maintenance or storage problems should contact the CAP/AO for guidance and assistance.  Storage problems which cannot be resolved by field offices will be referred to the National Office, Records Unit.  All "active" borrower case folders should be reviewed at least once every 5 years.  During this review, remove and destroy extra or duplicate copies of forms.  Interim construction drawings, specifications, and similar type materials should be returned to the borrower.  Also, during this review, relocate any "inactive" record material to "continuation folders."  Upon completion of the review of a borrower's case folder(s), enter the FY in which the review was conducted, in pencil, on the folder label following the last 5-year review. (Revised 08-23-06, PN 401.)

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(Revision 2)
(04-09-97)  PN 275

RD Instruction 2033-A

 2033.10  Closed borrower case folders.

(a)  Determining "closed" borrower case folders.

(1)  When a borrower (active, collection-only, debt settlement, or judgement) is reclassified "paid up" by payment-in-full, payment of approved settlement amount, or "otherwise satisfied," as prescribed in RD Instruction 404.1, and no longer has an obligation to or unresolved legal action pending with Rural Development, the one or more case folders are considered "closed."

(2)  Guaranteed loans will be considered "closed" when the requirements of any "guarantee" document have been terminated and all obligations due Rural Development or the lender have been paid in full or otherwise satisfied.

(3)  In acquired property cases, the former borrower's case folder(s) will not be considered "closed" until the redemption period, if any, has expired.

(4)  Grant-only or combination loan and grant case folders. 

(i)  Section 504 Rural Housing grant-only or combination loan and grant case folders are considered "closed" 3 FYs after the end of the FY in which the Section 504 Repayment Agreement is signed, or when the loan is satisfied, whichever is later.

(ii)  Farm Labor Housing grant-only or combination loan and grant case folders are considered "closed" 50 years after the year in which the grant is made.  However, if there is a default under the obligations of the Labor Housing grant agreement and the grant agreement is terminated by the Government, the case folder will be considered "closed" only when the Government's requirements are satisfied.

(iii)  Industrial Development, Community Facilities, and Water and Waste Disposal Development grant-only or combination loan and grant case folders are considered "closed" ONLY when all of the grantee's grant obligations, as shown in any grant agreement, have been satisfied, subordinated, released, or terminated, provided the loan has been paid in full or otherwise satisfied.  For Community Facilities grants used to acquire or improve real property or purchase equipment, the record retention period is based on the useful life of the property or equipment, or until the property or equipment is replaced, sold, transferred, or is of little or no value, as required by 7 CFR 3015, 3016, or 3019 in effect at the time and which may be subsequently modified.  
(Revised 07-19-99, SPECIAL PN.)

30
(Revision 2)

RD Instruction 2033-A
2033.10(a)(4) (Con.)

(iv)  Self-Help Technical Assistance and Comprehensive Areawide Water and Sewer Planning grants are considered "closed" at the end of 5 years after all funds have been properly accounted for, conditions of the grant agreement have been met, and the plan is serving the purpose for which it was developed.  Documentation in the case folder must indicate that these conditions have been met.

(v)  Technical Assistance and Training grants are considered "closed" 3 FYs after the end of the FY in which the project is completed, as shown in any grant agreement.

(vi)  Section 533 Housing Preservation grants are considered "closed" either 3 FYs after the expiration of the grant agreement for assistance to homeowners or 3 FYs after the expiration of the owner agreement for assistance to rental properties or co-ops. 

(b)  Maintenance and disposition of "closed" borrower case folders.

(1)  Labeling.  Concurrent with determining a borrower's case folder to be "closed," label the folder with the legend "CLOSED CASE 19__" with the FY entered in the blank space.  Additional information will be entered on the label of "closed" loan cases which have resulted in a loss to the Government and cases remaining subject to compliance review.

(i)  For "closed" loan case folders which have resulted in a loss to the Government, add "LOSS TO GOVERNMENT."  (See paragraph (b)(4)(ii) of this section for disposition information.)

(ii)  For recipients of development grants for water and waste disposal (no loan involved) which remain subject to compliance review after the closing, add "SUBJECT TO COMPLIANCE REVIEW" on the label of the case folder.

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RD Instruction 2033-A
2033.10(b) (Con.)

(2)  Return of documents.  When an account is "closed," check the case folder(s) for legal documents (deeds, leases, title, opinions, abstracts, insurance policies, waterstock or grazing certificates) or soil maps and plans prepared by the National Resources Conservation Service (NRCS), and final or "as built" plans and specifications.  These materials should be returned to the borrower as they will have served their purpose in Rural Development account servicing.  When returning documents use Form RD 140-4, "Transmittal of Documents," or other written means for establishing a record of their return.

(3)  Filing "Closed" case folders.  "Closed" case folders for which destruction is authorized in paragraph (b)(4) of this section should be arranged by name in one or more series according to office needs, but kept separate from "active" borrower case folders.

(4)  Disposition.

(i)  Destroy "closed" case folders with the legend "CLOSED 
CASE 19__," 1 FY after the end of the FY in which closed.

(ii)  Destroy loan case folders (meeting criteria in 2033.8(b)(6)(i) of this Instruction) labeled "LOSS TO GOVERNMENT," 7 FYs after the end of the FY in which closed.  Destroy other "Loss to the Government" folders 3 FYs after the FY in which closed. 

(iii)  Destroy closed case folders marked "APPLICATION REJECTED OR WITHDRAWN," 25 months after the application was rejected or withdrawn, or 1 FY after the case folder is considered "closed," whichever is later.

(iv)  Destroy "closed" case folders marked "GRANT APPLICATION REJECTED," 3 FYs after the end of the FY in which the grant-only or combination loan and grant application was rejected, or 1 FY after the end of the FY in which the case folder is considered "closed," whichever is later.

(v)  Destroy "closed" case folders marked "APPEALED" 1 FY after the end of the FY in which the final action was taken on the appeal (provided the 25-month retention period for a rejected or withdrawn application has been met), or 1 FY after the case folder is considered "closed," whichever is later.

32

RD Instruction 2033-A
2033.10(b)(4) (Con.)

(vi)  Retain "closed" case folders for grants, subject to civil rights' compliance review, until compliance reviews are no longer required as prescribed in RD Instruction 1901-E.  To prevent the inadvertent destruction of these folders during the review period, maintain them as a separate, clearly identified group.

(vii)  Retain "closed" case folders marked "DO NOT DESTROY" until permission to destroy is received from the State Director or National Office.

(5)  Destruction and Salvage.  When destroying official borrower case folders, offices may use any method which will ensure complete obliteration of confidential record information.  Reusable folders should be salvaged for future use.

2033.11  Section 504 housing assistance borrowers.

	The total amount outstanding of Section 504 loan will not exceed $20,000.  The total amount of a Section 504 grant to any individual recipient will not exceed $7,500, including any prior Section 504 grant assistance.  Combination loan and grant assistance will not exceed $27,500.

(a)  Section 504 borrower list.  A list of borrowers, arranged by county, who have received Section 504 assistance will be retained in the operational file folder 1944 - "Section 504 Loans and/or Grant Borrower List."  This list will include the following information recorded at the time a Section 504 loan and/or grant is made.

(1)  Borrower or grantee(s) name, address, and case number.

(2)  Name of co-owner/grantee(s), if any.

(3)  Amount of the loan and/or grant.

(4)  Date loan and/or grant was made.

(b)  Maintenance and disposition.  Section 504 housing assistance case folders will be maintained, closed, and disposed of in accordance with 2033.8 and 2033.10 of this Instruction.  The maintenance of the borrower list will permit destruction of closed Section 504 assistance case folders as prescribed in 2033.10(b)(4) of this Instruction.

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(04-09-97)  PN 275

RD Instruction 2033-A

2033.12  Destroying official record material.

	All materials eligible for destruction MUST be promptly destroyed.  The following destruction methods may be used.

(a)  Destroy file material as trash.  This may be done by the office or by services available through public refuse disposal facilities.

(b)  Sell or donate as waste paper.

(c)  Donate to nonprofit groups collecting waste paper for recycling purposes, providing no storage, transportation or other costs, or the possible disclosure of confidential information, is involved.

2033.13  Authority for disposition of Rural Development records.

	No official records may be destroyed without approval by the NARA, General Services Administration, and the General Accounting Office.

2033.14 - 2033.50  [Reserved]

Attachments:  Exhibits A [Reserved], B, and C.

oOo

34
(Revision 1)

 RD Instruction 2033-A
Exhibit B
Page 1

TABLE OF CONTENTS FOR ASSOCIATION-TYPE BORROWER CASE FILES

A processing checklist may be used in lieu of a Table of Contents provided the location of each document in the case(s) is shown on the checklist.  If a processing checklist is not used, the State Director will issue as a State Form a Table of Contents (prepared on one side of page only) to cover all National forms, State forms, and unnumbered items classified to each of the eight file positions in the borrower case folder(s).  Separate Tables of Contents may be prepared for each association-type loan, such as Business and Industrial, Rural Rental Housing, and Water and Waste Disposal, listing only those forms and documents pertaining to the specific type loan.  Example:

TABLE OF CONTENTS (ALL POSITIONS)
(File in position 1 as top item of initial folder)
__________________________________________________________________________
		   (4)	  (5)
		     "X" or    Remarks or
(1)	     (2)	(3)  Tab No.   Continu-
Form No.  Description of Record		Initial	ation
______________________________________________________Folder_____Folder___

SF 424.1, "Application for Federal   
  Assistance (For Non-Construction)," or
SF 424.2, "Application for Federal
  Assistance (For Construction)"	3	   X
RD 140-4 Transmittal of Documents	4	   X
RD 400-1 Equal Opportunity Agreement	6	   X
RD 400-4 Assurance Agreement	3	   X
RD 402-1 Deposit Agreement	2	   X
RD 426-1 Valuation of Buildings	7	   X

 				     Envelope
_____________________________________________________________Jacket 1 of 2

Explanation of Columns:

(1)  State Office will enter form numbers in numerical order.

(2)  State Office will enter the title of form or	description of unnumbered items.  Unnumbered items will	be listed following numbered forms.

(3)  State Office will enter file position.

(4)  The office responsible for maintaining the office borrower case folder will enter "X" when item is placed	in initial folder, or if "Tabs" are used, enter tab	number.

(4-11-90)  SPECIAL PN

RD Instruction 2033-A
Exhibit B
Page 2

(5)  Offices will enter description of other container(s) when a given item is not kept in the initial folder or an item is transferred to a continuation folder.  This column may also be used by the responsible office, State Office, or National Office for other pertinent information, such as initialing and dating by reviewing officials.

oOo

	RD Instruction 2033-A
	Exhibit C
Page 1

MAINTENANCE OF PROGRAM RECORDS ENTERED TO THE
AUTOMATED DISCREPANCY PROCESSING SYSTEM (ADPS)

This exhibit provides the records maintenance and internal control requirements for source/input and other documents that support transactions processed to ADPS via the Agency's field office terminal system.  Additionally, it provides standards for the timely and accurate manuscription and discrepancy correction of ADPS transactions to measure field office performance.

I.  Document Processing.

    A.  Completed authorized source/input documents will be used to support all transactions.  For internal control and audit trail purposes, there must be a clear record of responsibility for both the authorizing and the inputting of each transaction.  The approving official of the related ADPS transaction, e.g., County Supervisor, Program Chief, or his/her delegate, must sign and date the appropriate authorizing form or input document, whether or not there is a signature block for the Agency representative.  When there is no related authorizing form or input document, e.g., check requests, personnel should generate printouts of the completed ADPS input screen immediately after all data is entered and the screen prompt displays "Transaction has been updated."  This screen printout will be signed and dated by the approving official or his/her delegate and maintained as the authorizing input document.  Field office personnel who enter transactions to process must also notate their name, ADPS block number, and current processing date on the source/input document.  When a screen printout is used as the transaction input document, as with check requests, the user identification number of the employee entering the transaction, the ADPS block number, and the process date will be displayed on the screen printout; inputting personnel do not need to add this information to the printout.

    B.  Until transactions process, field offices should file the source/input documents or input screen printouts by processing date in an ADPS Unprocessed Transaction Pending File.  Each workday, ADPS Option 1, "Discrepancy Processing - Oldest Within Jurisdiction," or Option 2, "Discrepancy Processing by Case Number or Property Identification," will be accessed to determine the transactions that have processed or rejected.  If the transactions are not displayed, the related source/input documents or screen printouts will be removed from the pending file and placed in the appropriate case folders.

    C.  Discrepancies should be corrected and the related source/input document annotated with the corrected information, as appropriate.  This includes system generated discrepancies, e.g., cost items.  For discrepancies where there are no source/input documents, input screen

(04-19-95)  PN 244

RD Instruction 2033-A
Exhibit C
Page 2

printouts reflecting the corrected information should be generated.  The approving official (or his/her delegate) must sign and date the new screen printouts.  Attach previous screen printout to new screen printout.  The source/input documents or screen printouts should be filed by processing date in the ADPS Unprocessed Transaction Pending File.  Upon verification of the discrepancies processed by accessing ADPS Options 1 or 2, the related source/input documents or new screen printouts will be removed from the pending file and placed in the appropriate case folders.  The previous screen printouts will be destroyed. 

    D.  If field offices route manuscripted or discrepancy transactions to the Finance Office or mail documents to the Finance Office, District Offices, or State Offices for processing, the sending offices will retain the original or copies of the source/input documents, input screen printouts, and transmittal letters, as appropriate, in an ADPS Unprocessed Transaction Pending File by date sequence.  For routed transactions, the field offices will access ADPS Option 2 to determine the transactions that have been processed.  If the transactions are not displayed, the related source/input documents or screen printouts will be removed from the pending file and placed in the appropriate case folders.  For documents mailed, the field offices will access the ADPS status screens (unless superseded by State Office guidelines) to determine whether the transactions have been processed.  Upon verification of the transactions processed, the related source/input documents or screen printouts will be removed from the pending file and placed in the appropriate case folders.

    E.  When District or State Offices enter transactions for other field offices, personnel entering the transactions must notate their name, ADPS block number, and current processing date on the source/input documents.  When there are no related source/input documents, input screen printouts should be generated.  (If an input screen printout is used as the only input document, personnel entering the transactions are not required to notate their name, ADPS block number, and current processing date on the printout.)  The approving official or his/her delegate must sign and date the source/input document or screen printout.  The source/input documents and screen printouts will be filed by processing date in an ADPS Unprocessed Transaction Pending File.  Upon verification of the transactions processed by accessing ADPS Options 1 or 2, the related source/input documents or screen printouts will be filed by processing date in an ADPS Processed Transaction File.  

    F.  If it is necessary to process transactions using OK-to-apply codes that require authorization justifying their use, the reasons for use must be indicated on the source/input documents or input screen printouts, as appropriate.  The reason must explain the unique conditions, terms, or 

RD Instruction 2033-A
Exhibit C
Page 3

coding on the transaction or account that make use of the OK-to-apply code necessary.  Do not use the general descriptions in the ADPS documentation as reasons.  For internal control purposes, the approving official must initial and date the reason for use.  The OK-to-apply codes that require authorization are identified in attachment 1 of this exhibit and the ADPS field office detail transaction and discrepancy codes manuals.  District 
and State Offices should monitor the use of OK-to-apply codes by using the FOCUS report titled DS04, "Use of OK-to-Apply Codes."

	G.  If it is necessary to use action pending codes (APCs) identifying the reasons for delays in processing transactions and the APCs do not specifically describe the circumstances that require their use, e.g., 
APC FG - Other, the reasons for use must be clearly indicated on the source/input documents or input screen printouts, as appropriate.   If additional APCs are needed to identify specific conditions that frequently occur and result in not being able to meet transaction processing timeframes, field offices may request new APCs on Form RD 2006-21, "Information Systems Management (ISM) Request for Changes to User Documentation."   FOCUS Reports DSO3, "Report of Manuscripted Transactions by Jurisdiction Code, Transaction Code, and Borrower Case Number," and DSO1, "Aging of Discrepancies in Field Office Jurisdictions," may be used to monitor the appropriate use of APCs.  Also, Report Code 533, "Analysis of Submitted/Rejected Transactions by Jurisdiction Code," Report Code 534, "Analysis of Submitted/Rejected Transactions by Operator ID," and Report Code 535, "Analysis of Submitted/Rejected Transactions by State Code," identify the APCs of transactions which have been routed to the Finance Office.

II.   Transaction Timeliness

	A.  Transactions should be processed within 5 or 10 calendar days of the effective dates.  For source/input documents prepared at the field office, 5 calendar days are permissible for processing, e.g., loan obligation.  For source/input documents prepared external to the field offices, 10 calendar days are permissible for processing, e.g., loan closing.  Three additional days are added to the 5 or 10 calendar day timeframes for transactions mailed to District or State Offices for processing.  An exception to the 5/10 day standard is allowed for Transaction Code 8M, "Limited Resource Loan Review."  Reviews performed during the month are considered timely if processed by the fifth day of the following month.  Attachment 1 to this exhibit shows the timeframes in which transactions should be processed.  If discrepancies occur, the transactions should be corrected within 5 or 14 calendar days of the initial rejection dates.  For discrepancies due to suspend codes on the borrower accounts, 14 days are allowed for correction.

(04-19-95)  PN 244

RD Instruction 2033-A
Exhibit C
Page 4

	B.  District and State Offices should monitor the timely processing of transactions by using the FOCUS reports titled DSO3, "Report of Manuscripted Transactions by Jurisdiction Code, Transaction Code, and Borrower Case Number," and DSO1, "Aging of Discrepancies in Field Office 
Jurisdictions."  The following timeliness rate criteria will be used for evaluating jurisdictional performance levels on a monthly basis:

         Timeliness Rate                Performance Level

         More than 95 percent           Superior
         80-95 percent                  Acceptable
         Less than 80 percent           Unacceptable

	C.  To ensure timely initial processing of transactions or correction of discrepancies, the field offices should:

	o  Train a minimum of two office employees to process transactions.

	o  Require loan closing agents to return closing information on the
	   dates the loans are closed.

	o  Process data as of the effective or receipt dates of the related
	   loan making/servicing actions or the next workday thereafter.

	o  Use APCs when it is necessary to delay initial processing or
        discrepancy correction.

III.  Transaction Accuracy.

	A.  To ensure that transactions are processed accurately, field offices should use the ADPS manuals to review exception conditions, premanuscripting validations, and processing procedures for the specific transactions being processed.  Monitoring accurate processing of data can be performed by using Report Codes 533, "Analysis of Submitted/Rejected Transactions by Jurisdiction Code;" 534, "Analysis of Submitted/Rejected Transactions by Operator ID;" and 535, "Analysis of Submitted/Rejected Transactions by State Code."  The following accuracy rate criteria will be used for evaluating jurisdictional performance levels on a monthly basis:

         Accuracy Rate                  Performance Level
       
	    More than 90 percent           Superior
         85-90 percent                  Acceptable
         Less than 85 percent           Unacceptable

	B.  Processing procedures to minimize discrepancies include the following:

	o  Validate data as the source/input documents are prepared.

RD Instruction 2033-A
Exhibit C
Page 5

	o  For source/input documents prepared or approved external to the
	   field offices responsible for processing the transactions,
	   validate the data upon receipt of the source/input documents.

	o  Process data as of the effective or receipt dates of the
	   source/input documents or the next workday thereafter.

	o  Perform validations on discrepancy transactions to minimize
	   additional discrepancies.

IV.  Document Retention.

Forms and screen printouts will be retained by position in the case folders in accordance with exhibit A of this Instruction.  The retention requirements for the folders will govern the entire contents.  At the end of the retention periods, all documents containing sensitive borrower 
information should be destroyed by shredding or other method which renders the material unreadable.

oOo

(04-19-95)  PN 244

Exh C, Attachs 1 & 2 in PDF ONLY.