Requirement To Keep Accounts, Records, Reports, Or Statements

Statutes have conferred power of original inquiry upon administrative agencies.  In the process of inquiry or investigation, an administrative agency exercises its power to get information from persons who have the required information.  When making a request for information, administrative agencies are not required to exhaust other sources like search, and seizure.

The agency can request for information even on the basis of an “official curiosity”.  Although official curiosity was held a sufficient ground for making request for information, later decisions determined that official curiosity alone was not sufficient for a request for information.  There should be demonstrable reason to believe that the enquiry is legitimate and also a reasonable belief that the records sought are necessary for such investigation.  If the official curiosity standard alone is followed, it will have an effect of overruling the relevant provisions of law.  Further, if the official curiosity standard alone is applied in investigation process, the agency will have a tendency to avoid showing relevancy of the records called for investigation.

In all cases, the ultimate burden of satisfying that a particular record is relevant for a legitimate investigation is on the agency.  However, the initial burden is on the person challenging the investigation.  S/he has to prove:

  • facts showing that the documents sought for are not relevant for the investigation,
  • that s/he has not committed any offence related to the investigation, or
  • that s/he is subjected to harassments by that request.

Courts have always come to the aid of administrative agencies in compelling production of documents and attendance of witnesses.  Courts have always been liberal in permitting administrative agencies to exercise its full power to require production of books, papers, and documents.  In cases of refusal to obey an order of an administrative agency, district courts of the U.S. have jurisdiction to order the person to whom the order for production is issued to be present before the administrative agency and to give testimony related to the investigation.[i]

An administrative agency can, in its process of investigation, order a company to keep its accounts and submit report.  The company cannot challenge the administrative agency’s order on the ground of hardship even if the company will have to transgress statutory and constitutional limits to comply the order.  These wide powers are necessary for administrative agencies to render its functions effectually, and efficaciously.  Of course, while exercising these powers, an administrative agency has to show with substantial evidence that:

  • the said powers were exercised for a lawful investigation;
  • the company is not overburdened while complying with the orders;
  • the statutory standards of just and reasonable has been followed.
    [i]         NLRB v. Line, 50 F.3d 311 (5th Cir. Tex. 1995)

Inside Requirement To Keep Accounts, Records, Reports, Or Statements