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Inspections of Firearms Dealers by the Bureau of Alcohol, Tobacco, Firearms and Explosives

Report Number I-2004-005
July 2004


On June 4, 2004, the Office of the Inspector General (OIG) sent copies of a draft of this report to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with a request for written comments. The ATF responded to us in a memorandum dated June 29, 2004.

The ATF fully concurred with seven of our nine recommendations. The ATF did not concur with our recommendation on updating its inspection tracking system to more accurately segregate and report on all Inspector time spent on inspections. Instead, the ATF offered an alternative solution for updating N-SPECT, explaining that an update to the overall system, N-FOCIS, would accomplish what we recommended. The ATF also conditionally concurred with the recommendation on developing a model to more accurately identify potential firearms trafficking, although it suggested that implementing the recommendation would be difficult. The ATF also provided general comments on the findings contained in the draft report. Our analysis of the ATF's comments on the recommendations and findings in the draft report follows.


Recommendation 1: Develop a standard, streamlined inspection process that includes in-person inspections of all Federal Firearms Licensee (FFL) applicants; more efficient inventory and records reviews; automated inspection reporting; and consistent examination of indicators of firearms trafficking.

Recommendation 2: Conduct a pilot project to test the streamlined inspection procedures and establish appropriate time standards for conducting these inspections.

Recommendation 3: Revise the staffing requirement report using the time standards to reflect the number of Inspectors needed to conduct compliance inspections on a triennial basis or on an alternative schedule based on the FFL's compliance history.

Recommendation 4: Develop alternatives for better aligning Inspector resources with the distribution of FFLs, such as by redrawing Field Division boundaries, realigning personnel, or other methods.

Recommendation 5: Update the inspection tracking system to accurately segregate and report on Inspector time spent preparing for inspections, in travel, onsite at FFLs, and conducting other administrative duties.

Recommendation 6: Prepare quarterly reports on the productivity and results achieved by each Field Division.

Recommendation 7: Direct the National Licensing Center to develop an adverse action tracking system to monitor the progress and timeliness of FFL denials and revocations from the time an Inspector makes a recommendation until the proceedings are finalized.

Recommendation 8: Continue coordinating with the Department of Justice, Office of Legislative Affairs, to gain the authority to suspend or impose civil penalties on FFLs that violate federal firearms laws.

Recommendation 9: To improve the comprehensiveness of crime gun tracing by law enforcement agencies:

a. Coordinate with the Office of Justice Programs to determine the feasibility of using discretionary grant funding to support crime gun tracing.

b. Develop a model for more accurately identifying potential firearms trafficking through the analysis of an FFL's firearms sales volume and the number of firearms traced to the FFL.


In addition to addressing the recommendations, the ATF remarked on the draft report's findings. In this section, we summarize the ATF's comments and provide our analysis of its planned actions.

FINDING: The ATF does not conduct in-person application inspections on all new FFLs to verify applicant information and ensure that they understand firearms laws.

FINDING: The ATF does not regularly conduct compliance inspections on active FFLs, including large-scale retailers.

FINDING: The ATF does not identify and inspect all FFLs that exhibited indicators of potential violations or gun trafficking.

FINDING: Gun tracing has significant shortcomings that limit its use for identifying FFLs that should be inspected.

FINDING: ATF Field Divisions implement inspections inconsistently.

FINDING: Suspected criminal violations are not always referred for investigation.

FINDING: The ATF acts infrequently to revoke federal firearms licenses, and the process is not timely. New ATF policy begins to address inconsistent and untimely adverse actions.

FINDING: By streamlining and standardizing inspections, the ATF could dramatically improve the FFL inspection program.

FINDING: The ATF does not consistently report inspection performance.

FINDING: New restrictions on retention of gun purchaser data will hinder the ATF's ability to detect fraudulent background checks.


  1. The ATF was unable to provide us with consolidated data on the number of guns traced to FFLs in each Division, and instead provided the number of traces submitted by law enforcement agencies, by Field Division.