The Bureau of Alcohol, Tobacco, Firearms and Explosives’ National Firearms
Registration and Transfer Record
Evaluation and Inspections Report I-2007-006
Office of the Inspector General
The NFA Branch has improved significantly the timeliness of processing NFA applications and responding to customer inquiries.
We found that the NFA Branch has improved significantly its processing time for NFA applications and its process for responding to customer inquiries since 2004. Branch staff attribute these improvements to placing a priority on customer service, hiring additional staff, and working with the NFA weapons industry. Additionally, IOIs and Special Agents in ATF field offices reported satisfaction with the level of service they received from the NFA Branch since the Branch moved to West Virginia.
The NFA Branch has decreased the time it takes to process applications.
Between 2004 and 2006, the average processing time for NFA Forms 1, 3, 4, and 5 combined decreased from approximately 39 days to approximately 10 days.24 We focused on these four forms because individual NFA weapons owners and dealers use them. Table 3 describes the use of each form.
Table 3: NFA Weapons Applications Forms
Application to Make and Register a Firearm
Application for Tax-Exempt Transfer of Firearm and Registration to Special Occupational Taxpayer
Dealer, Manufacturer, Importer
Application for Tax-Paid Transfer and Registration of a Firearm
Application for Tax-Exempt Transfer and Registration of a Firearm
Dealer, Manufacturer, Importer
Average processing time for Form 1 decreased from 99 days in 2004 to 28 days in 2006, while processing time for Form 4 decreased from 81 days to 23.6 days. Forms 1 and 4 typically take longer than other forms to process because NFA Branch staff review additional paperwork with them, such as fingerprint cards, and spend more time answering questions from individual applicants who often have less experience with the application process.
The NFA Branch decreased the average processing time for Form 3 from 30 days in 2004 to 4 days in 2006, while decreasing average processing time for Form 5 from 30 days to 9 days. Figure 3 shows the improvement in processing times for Forms 1, 3, 4, and 5 since 2004.
Source: ATF, NFRTR data
To facilitate processing of applications, the NFA Branch hired three contract Data Entry Clerks in 2002 and, by 2005, increased the number of clerks to seven. Data Entry Clerks enter information from paper application forms into the NFRTR, allowing the Examiners who used to enter data to focus on reviewing the content of applications.
The NFA Branch has improved the process for responding to customer inquiries.
The NFA Branch has improved its process for responding to NFA weapons applicants’ inquiries by placing a priority on customer service and hiring additional staff to answer the telephones. In a 2003 ATF inspection report, NFA Branch staff identified handling telephone calls as a challenge to providing satisfactory customer service.25 At the time, the Acting Branch Chief stated that the Branch had no clerks to handle customer service issues and the large number of incoming telephone calls. Staff members needed to spend most of their time processing forms and working with the NFRTR, and could not devote the time needed to respond to customer inquiries.
In 2005, the NFA Branch hired three contract Customer Service Representatives (CSR) to answer telephone calls and respond to customer inquiries. The three CSRs handle the majority of telephone calls that would otherwise divert NFA Branch staff from processing applications or conducting records searches. CSRs answer questions from individuals, members of the NFA weapons industry, and ATF field staff usually within 1 workday. If they cannot answer a question themselves, they direct the call to the appropriate NFA Branch staff member. In addition to their primary duty of answering the telephones, CSRs help with correspondence and filing.
In 2006, ATF noted in another inspection report that the NFA Branch Chief had “provided courteous service” and “displayed a positive image of ATF to industry members.”26 Members of the National Firearms Act Trade and Collectors Association (NFATCA) – an association that provides guidance and support to the NFA weapons industry and is made up of NFA weapons dealers, manufacturers, importers, and owners – also told us that the quality of the service of the NFA Branch had improved over the past 2 years. As part of this review, we interviewed a federal firearms licensee, a member of the NFATCA, who stated that he was satisfied with the recent service provided to him by the NFA Branch.
We also reviewed various NFA industry websites and electronic mailing lists used by NFA weapons owners and dealers and found several positive comments about the NFA Branch and the improvement in application processing. For example, an article in Small Arms Review magazine about an NFA weapons-related gun show held in 2006 states:
There is almost a universal feeling regarding the excellent service the community has been provided with since the move of the NFA Branch from Washington, D.C. to West Virginia. Under the direction of the NFA Branch Chief Ken Houchens, transfer times have been cut to a fragment of their previous lengths and customer service is at an all time high.27
Also, in the narrative response to our survey, an IOI related a licensee’s comment that NFA Branch staff “are much more customer service oriented and supportive to the industry, and more efficient than they have ever been in the past.” Another IOI who formerly held a federal firearms license (FFL) stated,
I previously held a Type 01 FFL and Class 3 occupational tax (dealer in NFA). I had contact with the “old” branch then and have had on the job contact with the “new” since working for ATF (August, 2005). The attitudes, professionalism, and procedural knowledge of the employees have improved dramatically. Based on my personal experience and reports I hear or read from people engaged in the industry as dealers or collectors, the turnaround times on transfers have dropped considerably. In my opinion, the NFA Branch has transformed into a very positive representative of our agency.
The NFA Branch is working with the NFA industry to communicate more effectively with weapons owners.
The NFA Branch has created a working relationship with the NFATCA. To increase communication between the NFA weapons industry and the NFA Branch, the Branch hosted a meeting in West Virginia in 2006 with members of the NFATCA executive board to discuss NFA- and NFRTR-related issues. The NFATCA used the NFA Branch’s comments in two articles published in the Small Arms Review magazine providing tips on completing applications correctly and legibly to lessen the amount of time needed for corrections.28
The NFA Branch and the NFATCA also have collaborated to write a handbook on the processing of NFA weapons applications.29 The first draft of the handbook was completed in December 2006. In March 2007, the ATF Chief Counsel’s office was reviewing the draft, and ATF plans to make the handbook publicly available on the ATF website as soon as it is finalized. The NFATCA intends to promote the handbook as a guide for all NFA weapons owners. NFA Branch officials said they plan to annually update the handbook with the NFATCA’s assistance.
However, in the course of reviewing the ATF website, we found it very difficult to locate information relevant to NFA weapons owners.
Additionally, the site’s generally poor navigation may impede the public’s access to the NFA handbook. Neither the site’s main page nor its firearms page displays a link to NFA information. In addition, the site’s search engine returns more than 240 “hits” when queried for “NFA,” and because meta tags were not used to describe the information on the pages returned by the search feature, it is difficult for users to tell which “hits” will take them to the information they are seeking. Among the “hits” is a page apparently created expressly for NFA information, but the page lacks direct links to the application forms NFA weapons owners and licensees are required to submit, filing instructions, or a frequently asked questions section. A direct link to all NFA information (and eventually the NFA handbook) from ATF’s homepage would further the NFA Branch’s efforts to communicate more effectively with NFA weapons owners and licensees.
The two NFATCA board members we interviewed praised the increased communication between the NFA Branch and the NFA weapons industry and noted significant improvement in the efficiency and responsiveness of the NFA Branch over the past 2 years. NFATCA board members told us that the process for registering and transferring NFA weapons has “vastly improved.” The NFATCA also stated that the NFA weapons industry speaks highly of the NFA Branch Examiners and Specialists and praises their progress in minimizing the time it takes them to process and approve an application. According to the NFATCA, the greatest improvement in the NFA Branch is that NFA weapons owners and federal firearms licensees can contact the NFA Branch with questions about the application process. Additionally, the NFATCA believes that NFA Branch Examiners are more knowledgeable about NFA weapons because applicants have told them that the Examiners are asking more questions about model numbers and weapon characteristics to prevent errors in the information entered into the NFRTR.
ATF field staff reported satisfaction with NFA Branch customer service.
Six of the 10 IOIs interviewed and 25 of the 27 Special Agents interviewed stated that they were “satisfied” or “very satisfied” with the information they received from the NFA Branch. Additionally, we received positive comments about the NFA Branch from IOIs responding to our survey. Two IOIs commented specifically:
“The improvement of the NFA Branch under [the current Branch Chief] is nothing short of phenomenal.”
“I have noticed that, as a whole, the NFA Branch has improved significantly over the past months. Many of the [federal firearms licensees] have noticed this as well.”
Several other IOI survey respondents stated that the NFA Branch provides helpful information for their work with compliance inspections, including one who said, “I think the NFA Branch does an excellent job of answering questions from the IOIs in the field as to which NFA forms are required and when they are submitted.” One Special Agent told us in an interview that he is satisfied with the work of the Branch and that it has improved since the Branch offices were relocated to West Virginia.
Both IOIs and Special Agents reported satisfaction with the timeliness of the NFA Branch’s response to their requests. IOIs we interviewed stated that the NFA Branch usually sends them an inventory report 2 to 4 days after they submit their request and rarely takes more than 1 week to respond to a request. One IOI stated, “The staff at the NFA Branch has always been professional and helpful. When additional information is required, forms are always faxed in a short period of time.” Another IOI mentioned that he has received increasingly expedited service in the past few years from the Branch.
Our survey results also verified the timeliness of the NFA Branch in providing inventory reports. We asked IOIs in our survey, “Once requested, how many days does it take to receive the inventory report from the NFA Branch?” The responses indicate a median number of 4 days to receive an inventory report, and of the 293 IOIs answering this question, only 3.4 percent (10) indicated that it took over 2 weeks to receive an inventory report.
Although discrepancies in inventory reports are still a problem (discussed later in the report), a few IOIs told us in the survey that they have noticed an improvement in the accuracy of inventory reports. One IOI told us in the OIG survey, “I feel that the NFRTR has improved greatly in the past couple years and [federal firearms licensees] are noticing that when you request [a record] be amended, that it is getting amended.” Another IOI said, “In the past, there was no follow through by NFA Branch on recommended corrections. This seems to have changed in the last year.”
The Special Agents we interviewed, like the IOIs, were satisfied with the length of time the NFA Branch took to respond to their requests, describing the turnaround time as “fast” and the NFA Branch as “efficient.” Of the 27 Special Agents we interviewed, 7 said they received the results of a records check the same day of the request, 8 received the results within 2 days, 2 received the results within 3 days, 4 received results within 1 week. Three others said they received responses to urgent requests in a few hours, and two described responses as “prompt.” Only one Special Agent said it took more than a week to receive results of a records check. An NFA Branch Specialist told us that the Branch attempts to complete Special Agent requests for records checks within 2 to 3 days and urgent requests within 1 day.
ATF internal reports also show that the field offices have been satisfied with the work of the NFA Branch. In an October 2006 survey of the 31 field offices, conducted as part of an internal review of the NFA Branch, over 90 percent of ATF field offices reported average or higher satisfaction with the quality of the Branch’s service. The review gave the Branch an overall rating of “effective and efficient.”30
NFA Branch staff do not process NFA weapons applications or enter data into the NFRTR in a consistent manner.
We found that NFA Branch staff do not process applications or enter data uniformly into the NFRTR, which results in errors in NFRTR records, reports, and queries as well as inconsistent decisions on NFA weapons registration and transfer applications. The NFA Branch has not established adequate standard operating procedures for working with the NFRTR and processing NFRTR applications. Further, there is no structured training for NFA Branch staff members when first hired. In addition, NFA Branch managers do not have regular communication with staff members, and the Examiners responsible for reviewing and processing application forms receive conflicting direction from their supervisors.
The NFA Branch lacks a comprehensive standard operating procedures manual.
We found that the NFA Branch’s memorandums and directives on specific processes related to the NFA and the NFRTR do not cover all day-to-day tasks the staff perform. When the NFA Branch Chief started in his position in 2005, he inherited an undated manual of standard operating procedures for processing NFA forms. He told us the manual was under revision but that he has not had enough staff to complete the revision. None of the staff members we interviewed had ever received a copy of this manual, although some of them had been with the NFA Branch for over 15 years. Staff members reported that they had developed their own procedures manual by compiling various documents. For example, an NFA Branch Specialist who conducts records checks stated, “We have over the years made up our own internal [personal] manual.” An Examiner told us, “I had to start my own document with all the policies and procedures because there is no [standard operating procedures] manual.”
We reviewed the various memorandums and directives provided to NFA Branch staff in place of a standard operating procedures manual and determined that they were usually specific to one issue and did not cover the basic information needed to process applications and enter data into the NFRTR. For example, one memorandum describes how a Native American tribal police department can use a specific application form as long as the department has been designated a law enforcement agency by the Bureau of Indian Affairs.31 Another document lists the information about a pending application that NFA Branch staff can give to those transferring and receiving weapons. The procedures and guidance that NFA Branch staff told us were important, but not covered by the various documents, are outlined below.
Data Entry – There are no standards for entering abbreviations and other data in the NFRTR. For example, staff members use different abbreviations to signify a weapon’s caliber. One NFA Branch staff member may use “.9” to signify a 9-millimeter caliber weapon, while another may use “.9mm,” and a third staff member may use “.9m.” NFA Branch staff told us this variation could lead to errors when searching or querying the NFRTR and staff may not know to search using other abbreviations.
File Maintenance and Contact with Applicants – Each Examiner has a different method of keeping files and contacting applicants with pending applications. Application forms may contain errors, or a check of the National Crime Information Center (NCIC) may reveal a criminal charge or conviction under the applicant’s name.32 There are no standards specifying when and how often to contact the applicant other than to send an initial error letter. Applicants are supposed to have 30 days to correct errors on their applications or provide evidence that a criminal charge was dismissed; but some Examiners allow more time or call the applicant before sending written communication, which leads to inconsistencies in the approval of applications and variations in customer service.
Technical “Workarounds” – There is no standard direction on how to handle or overcome NFRTR technical flaws. For example, the NFRTR automatically splits a weapon’s record into two separate records when incorrect information or a change to the weapon’s specifications is entered because the NFRTR interprets the new information as a new weapon. Staff members have figured out how to work around the flaws by conducting searches using all variations of a name, address, and weapon serial number and by fixing errors in the NFRTR records when encountered. However, it is not clear if these trial-and-error methods are the standard or most efficient methods for handling technical issues. (We discuss the NFRTR’s technical flaws in more detail later in the report.)
Responsibility for Correcting Errors – There are no standards that assign responsibility for fixing certain errors. For example, if an Examiner or Specialist finds an error in an NFRTR record while processing a new application for the transfer of a weapon, there is no clear direction as to who is responsible for fixing the error. Most Examiners and Specialists told us they fix the error if possible, but some may refer it to a Section Chief or to the staff member that worked on the record previously.
Without written procedures, NFA Branch staff members told us that they had to rely on other Branch staff or managers to explain what they believed were the proper procedures for processing applications and navigating the NFRTR database. One Examiner stated, “I wish there were procedures, guidance, or policy in writing... it is all just ‘known’ and transferred” from staff member to staff member. A Section Chief explained that NFA Branch staff “mainly learn on the job and are expected to ask questions of other Examiners and Section Chiefs.” Staff members said they were not sure whether the information “passed down” represented the acceptable standard for the NFA Branch. For example, we found that the NFA Branch staff are not handling suspicious applications (such as one where an applicant is attempting to transfer a weapon for which the applicant is not the current owner in the NFRTR) consistently because there are no standard procedures outlining how to handle these applications.
When NFA Branch staff members identify suspicious applications to transfer or register weapons, according to Branch managers staff members are supposed to go directly to their Section Chiefs. The Section Chief then may refer it to the Branch Chief and the Branch Program Manager for review. If they believe there may be criminal intent, the Branch drafts a formal memorandum for referral to an ATF field office for investigation. Because there are no written standard operating procedures for referrals and the Branch does not keep track of referrals or identify suspicious applications in the NFRTR, we did not find evidence that staff were following management’s verbal instructions.
Training is inadequate, especially for new employees.
The training provided to NFA Branch staff when first hired is insufficient, ad hoc, and not uniform. All the staff we interviewed told us that initial training was unstructured and consisted of sitting beside a more experienced staff member and watching that member work on the NFRTR or having the experienced staff member watch the new employee use the NFRTR and process applications. The length of this ad hoc training ranged from several days to several weeks. One Examiner described the training as “sloppy” and further stated:
Someone [a more experienced staff member] would sit with the new Examiners on occasion to go over how to use the NFRTR, but it was not for a long time and was not consistent.... Examiners just started working on the computer.
In addition to training on the NFRTR, staff told us that they needed more information on NFA weapons, such as the physical descriptions, to be able to easily identify an NFA weapon, as well as specific and up-to-date information on state laws and regulations that relate to NFA weapons because state laws change periodically and are complicated. The NFA Branch provides one binder with printouts of all current NFA-related state laws and regulations. However, staff said that the legislation related to NFA weapons is complex and not written in an easily understandable format, and they were not comfortable interpreting it without assistance.
Staff members told us that as a result of inadequate and unstructured training at the beginning of their employment, they were uncertain how to use the NFRTR, lacked skill in processing the applications or conducting searches, were not familiar with the NFA, and did not have all the information necessary to accomplish their jobs. Staff stated that it was difficult to become familiar with the NFRTR and navigate through the database, a vital skill needed to process applications and conduct records checks. One Examiner told us that because of poor training not all staff members are “on the same page” on how they approach the work and applications may be processed incorrectly. He cited an instance in which an Examiner needed to know whether a state allowed a certain type of NFA weapon, and rather than researching the current state law or regulation, the Examiner simply queried the NFRTR to view a similar transaction in that state that had been approved in the past. State laws and regulations may change since a previous transaction, but Examiners are not kept current on these changes and are not trained to research the laws and regulations appropriately instead of copying old transactions.
We also found that inadequate training could affect the direction given to NFA Branch staff as well as information provided to the ATF field offices. For example, the lack of training on NFA-related state laws and regulations affected the guidance from Section Chiefs to Examiners. Further, an IOI survey respondent commented, “ We can call [the] NFA [Branch] and speak to different people [on the same issue] and get different answers. This has happened more than a few times in the past.”
The Section Chiefs are usually selected from the Examiner pool and do not receive additional training, either supervisory or NFA-related. They receive the same ad hoc training as other NFA Branch staff, and the quality of the information received during the training is not standard. Two of the Examiners we interviewed told us that they have received different direction from the same Section Chief on two identical cases, and they have received different direction on identical issues from different Section Chiefs. For example, an Examiner explained that she had two different applicants with NCIC “hits” (meaning that the applicants had criminal charges against them). Both applicants had the same criminal charge. However, the Section Chief advised her to approve one application to register or transfer a weapon but to disapprove the other application. The Examiner was not certain if there were variables that affected the decision to approve or disapprove an application, and the Section Chief did not communicate the reasoning for each decision. The Examiner further stated that she had received conflicting direction on other occasions, especially with decisions based on interpretation of NFA-related state laws.
The second Examiner described the incidences of receiving conflicting direction from his Section Chief as directly related to the complex legislation and regulations in each state on NFA weapons. He told us, “ A lot of the circumstances where different direction was given revolved around state regulations. A particular type of weapon may be legal one time [in that state] and then later you find out they told someone else that it wasn’t.”
Because new staff members receive different training from different people who also were not formally trained, the quality of the training in terms of topics covered and accuracy of information is insufficient. Incomplete and inaccurate training leads to errors in the NFRTR and in decisions based on the NFRTR. Moreover, variations in direction based on inadequate training could produce inconsistent approvals or disapprovals of NFA weapons applications.
Managers’ communication with staff is sporadic.
The NFA Branch managers do not communicate regularly with staff. Most staff members told us they are comfortable asking questions of Section Chiefs and the NFA Branch Chief but need more structured and regular forms of communication to stay current on changes that affect the NFA Branch.
All of the NFA Branch staff said that they sporadically receive e-mails and memorandums from management on administrative, procedural, or NFA issues. An Examiner told us, “Sometimes the Section Chiefs will e-mail us with information about interpretation of state regulations, but communication is not [regular].” Another NFA Branch Specialist told us that approximately 10 years ago, the Branch held staff meetings to discuss specific issues, but no longer does so. When a new Examiner asked her Section Chief if they could have staff meetings, the Section Chief responded, “I don’t do meetings.” Without coordinated and regular communication, Branch managers cannot update staff on the complex regulations and issues surrounding NFA weapons and ensure that direction is given in a standard manner. Moreover, when Examiners encounter a technical problem in an NFRTR record and ask Section Chiefs for assistance, the Section Chiefs will often fix the record themselves and fail to communicate with or teach the Examiner how to solve the problem in the future.
NFA Branch Actions to Address Identified Needs
To address the needs for specific training expressed by staff, the NFA Branch Chief provided several training opportunities. In October 2006, the NFA Branch Chief sent all 10 Examiners to a conference in Washington, D.C., that included information on NFA weapons and allowed the staff to interact with the NFA weapons industry members. Six of the 10 Examiners attended an additional conference in 2006, which included information and sessions related to the NFA weapons industry. The NFA Branch Chief told us that all Examiners are encouraged to attend these conferences and he believed that more staff would take advantage of the conferences in 2007.
In 2006, at the request of the NFA Branch Chief, two attorneys from the Chief Counsel’s office (on-site in West Virginia since late 2006) held a training session for NFA Branch staff that focused on legal issues related to trusts and transferring ownership of NFA weapons. The two attorneys are available continuously to answer questions from NFA Branch staff. Additionally, one attorney offered to assist the NFA Branch in obtaining information from each ATF field office on the most recent NFA-related legislation and regulations for each state.
Lastly, in 2007, in response to the need expressed by NFA Branch staff to have greater familiarity with NFA weapons, the NFA Branch Chief sent 10 staff to training conducted by the ATF’s Firearms Technology Branch (FTB). The FTB, located in the same building as the NFA Branch, maintains a variety of NFA weapons in its library.
We believe these training sessions and opportunities are beneficial for the NFA Branch staff and should continue. However, staff still need structured technical training on the NFRTR database, processing applications, and conducting searches. Further, the Section Chiefs need training on supervisory techniques.
In March 2007, the NFA Branch initiated the first monthly meeting for Examiners. According to the NFA Branch Chief, the meetings are to be used to provide updates on NFA weapons industry issues, office policies, data entry concerns, fingerprint card scanning, training opportunities, and any other issues. The meeting is led by the Section Chiefs, attended by all Examiners, and includes time for an open forum where any concerns, issues, or questions can be presented by Examiners to management. A summary of issues and points discussed during the first meeting was distributed to Examiners afterwards. We believe this is an important step in improving communication in the NFA Branch, and the meetings should continue with staff input.
The NFA Branch is not promptly correcting a backlog of errors in NFRTR records identified during inspections of federal firearms licensees.
We found that the NFA Branch does not promptly correct errors IOIs identify in NFRTR records. Errors in NFRTR records can be caused by NFA Branch staff when entering data, by Examiners failing to update the NFRTR to reflect approved NFA weapons applications and by technical flaws in the programming of the NFRTR database. Other discrepancies can be caused by applicants incorrectly listing information on NFA weapon applications, and by licensees transferring or receiving NFA weapons before receiving approval from the NFA Branch.
Use of Inventory Reports
As part of compliance inspections of licensees that deal in NFA weapons, IOIs compare the NFRTR inventory report to the actual inventory of the licensee. This comparison is to ensure that all NFA weapons in the inventory are registered to the licensee and that all NFA weapons listed on the NFRTR inventory report are present on the licensee’s premises. IOIs also inspect the licensee’s NFA weapon transfer and registration paperwork for completeness and accuracy. IOIs note any discrepancies between the licensee’s inventory and the NFRTR report on a worksheet, make copies of all related NFA transfer and registration paperwork, and fax the relevant documents to the NFA Branch for resolution of all discrepancies identified. IOIs often work with the licensee and the NFA Branch to determine the origin of discrepancies so that they can be resolved as quickly as possible.
The NFA Branch is responsible for addressing errors and discrepancies after they are identified by IOIs during compliance inspections.33 However, the NFA Branch does not have established guidelines for reconciling errors and discrepancies within a certain amount of time after receiving them from IOIs. As of March 2007, the NFA Branch had a backlog of 61 discrepancy reports to reconcile.
In our interviews and survey, IOIs reported that discrepancies between licensees’ inventories and the NFRTR record were prevalent. In our survey, 46.5 percent of IOIs (139 of 299) reported that there was a discrepancy between the NFRTR inventory report and the licensee’s inventory “always” or “most of the time.” Further, 44.4 percent of IOI respondents (133 of 299) said that the discrepancy was due to an error in the NFRTR “always” or “most of the time.” In comparison, no IOI respondent reported that the error was “always” on the part of the licensee, and only 2 percent (6 of 299) reported that the error was on the part of the licensee “most of the time.”
In contrast to the IOIs, all of the Special Agents that we interviewed believed that the information they received from the NFRTR records checks was accurate. The Special Agents request NFRTR records checks to determine whether NFA weapons that they encounter during investigations are registered and to whom. None of the Special Agents believed that they had ever received incorrect information from the NFA Branch. One Special Agent noted that it would be very difficult for NFA Branch staff to reach an incorrect conclusion in a records search because he always provides them with so much specific information about the weapon and the suspect that the NFA Branch can always make a definitive conclusion about the weapon’s and individual’s registration status.
IOIs and Special Agents have different experiences with the accuracy of the information they receive from the NFRTR because the method for producing inventory reports for IOIs is different from the method for conducting records checks for Special Agents. NFA Branch Specialists produce inventory reports by running standard programs from the NFRTR that generate lists of all the firearms that are supposed to be owned by a specific licensee.34 However, because of programming flaws in the NFRTR (discussed later in the report) and delays in correcting previously identified discrepancies, these inventory lists often contain errors. In contrast, NFA Branch Specialists prepare records checks by performing numerous queries on all available weapon and suspect search terms and individually reviewing the results to see if the NFRTR contains any record that could pertain to the weapon or suspect in question.
Discrepancies between the NFRTR and licensees’ inventories delay completion of inspections and erode confidence in the NFRTR.
We found that discrepancies between the NFRTR and licensees’ inventories are frustrating and time consuming for IOIs and are disconcerting for licensees who can be referred for criminal investigation for violations of the NFA and GCA discovered in compliance inspections. According to the NFA Branch Chief, discrepancies between NFRTR inventory reports and licensee inventories make the NFA Branch look incompetent and can be disruptive to licensees’ operations.
Discrepancies are frustrating and time consuming for IOIs.
Some IOIs noted frustration over the NFA Branch’s failure to correct identified discrepancies in the NFRTR before a licensee’s next compliance inspection. Only five of the 10 IOIs that we interviewed said that discrepancies were corrected in the NFRTR by the time of subsequent inspections.35 Forty-three IOIs commented in the survey that the NFA Branch should make updates to the NFRTR in a timely fashion. NFA Branch staff also are supposed to notify the IOIs who submit discrepancy reports after corrections have been made, but IOIs told us that this is not always done. One IOI we interviewed stated that it would be helpful to know when and how discrepancies were resolved. In our survey, one IOI commented, “I always have to close the inspection without ever knowing if the problems were resolved.” The NFA Branch staff stated that they attempt to minimize the instances in which discrepancies are not reconciled in the NFRTR by the next inspection by completing the pending reconciliation when notified by an IOI that another inspection has been scheduled.
When we asked IOIs in our survey to tell us how errors and discrepancies in NFRTR inventory reports affect their ability to carry out compliance inspections, almost half of the respondents stated that inspections take more time, and a quarter of respondents said that errors called into question the accuracy of the information from the NFRTR. One IOI noted in a survey response, “If an Investigator [IOI] cannot obtain an accurate list of NFA weapons in an inventory, we cannot complete a proper inspection and reconcile that inventory.” ATF managers, NFA Branch staff, and field IOIs stated that the majority of discrepancies can be resolved quickly if the licensees can prove ownership of NFA weapons in their possession by producing the approved transfer and registration paperwork. One former NFA Branch Specialist noted that while most discrepancies can be resolved quickly, about one out of four may take an entire day to address because staff must locate and review paper records to analyze a weapon’s registration and transfer history.
Many IOIs commented in the survey about the discrepancies between the NFRTR reports and licensees’ inventories. For example, one survey respondent stated, “I feel that immediate action should be taken to correct any discrepancies noted during inspection.” Several IOIs suggested that having an NFA Branch staff member dedicated to serving as a contact for IOIs and resolving discrepancies would improve the process. Other comments included:
“We should have a standard procedure to report inconsistencies and to follow to find a remedy to those discrepancies. The procedure should require timelines for responses to IOI inventory requests and for the action taken regarding a discrepancy report.”
“Implement a process where information that is obtained in the field and is forwarded to the NFA Branch, to correct discrepancies, is acted upon. Which should reduce the amount of time spent re-addressing previously identified discrepancies.”
“Have NFA Branch report the resolution of discrepancies, that are found during inspections, back to the inspector/area office. I feel that a lot of investigators will just move on to the next assignment once NFA inventory discrepancies are reported and never consider if the discrepancies are resolved.”
“More or new quality control procedures need to be in place to make sure that corrections to the NFRTR are made.”
IOIs also expressed concern with the accuracy of the NFRTR in general and want ATF to improve the quality of the data. An IOI survey respondent stated, “I believe NFA items are the most important area of regulation and we should strive for complete accuracy in this realm.” When asked what suggestions they had for improving the NFRTR inventory reports or the work of the NFA Branch, many IOIs stated that the existing data in the NFRTR should be “cleaned up” and the Branch should establish a system to double-check new data as it is entered into the database. One of the IOIs we interviewed even suggested that IOIs be assigned to “perform comprehensive inspections of all licensees’ inventories that include NFA weapons to ensure that all records in the database are accurate.”
Discrepancies are disconcerting for federal firearms licensees.
The two NFATCA representatives and one federal firearms licensee we interviewed were very concerned with the accuracy of the NFRTR. Our survey found that the IOIs were aware of licensees’ concerns.
One of the NFATCA representatives who maintains a federal license for NFA weapons estimated that during his compliance inspections the NFRTR inventory reports were 25 to 30 percent inaccurate. This NFATCA representative explained that NFA weapons dealers fear compliance inspections because the NFRTR is inaccurate, not because their inventory records are inaccurate. The NFATCA representatives stated that NFA weapons dealers are concerned about NFRTR discrepancies being used by ATF to seize weapons or issue violations against the dealer. One NFATCA representative said that licensees that deal in NFA weapons “should not be afraid of compliance inspections because their records are probably better than ATF’s.”
IOIs were aware of federal firearms licensees concerns about the accuracy of the NFRTR. In responding to the survey question, “How do errors and discrepancies in the NFRTR inventory reports affect the licensees you inspect?,” IOIs stated that licensees are frustrated that the NFRTR is inaccurate and the inspections difficult to complete, worried about being investigated or cited with violations, and frustrated that their own records are held to higher standards of accuracy and completeness than NFRTR records. Some specific comments by the IOIs included:
“When repetitive errors are found in the NFRTR, the licensees lose their confidence in the integrity of the system.”
“While the burden of proof is generally placed upon the licensees to demonstrate that the firearms were properly transferred, incorrect information from the NFRTR can cause an undue burden for those licensees who have properly transferred the firearms yet must spend days or weeks searching for documentation to prove these transfers.”
“The licensees get frustrated and assume that inspectors are inept just because of an error in the NFRTR inventory report. The licensees then tend to tune out any suggestions or advice we give to them to help them in remaining or becoming compliant.”
Errors or discrepancies in the NFRTR have not resulted in inappropriate criminal prosecutions of NFA weapons owners and licensees.
Although letters from several citizens expressed concern that errors and discrepancies in the NFRTR leave them vulnerable to unwarranted administrative sanctions or criminal charges, we found this has not occurred. While ATF can include NFA violations discovered during compliance inspections on the Report of Violations, it cannot suspend or revoke a federal firearms license or issue administrative sanctions based on NFA violations alone.36 According to the Deputy Chief, Field Management Staff, Field Operations,
ATF may revoke a federal firearms license for willful violation of the Gun Control Act (GCA). Further, the GCA specifies a suspension and fine authority for violation of certain violations of the permanent Brady [law] provisions. Although ATF IOIs commonly cite NFA dealers for violations of the regulations at 27 CFR Part 479 [NFA], there is no revocation, suspension, or “administrative” fining authority for violations of the NFA.37
In 2006, ATF conducted 7,292 compliance inspections from which it issued 12,176 violations. Of these, less than 1 percent (53) was issued for NFA violations. In 2006, ATF issued an average of 1.7 violations per inspection, but only 0.007 NFA violations per inspection.38
We also found that IOIs are referring cases to Special Agents infrequently. When IOIs discover NFA weapons not registered to a licensee (and the licensee’s paperwork does not satisfactorily resolve the discrepancy) or other apparent deliberate violations of the NFA during compliance inspections, they can refer the case to Special Agents in the corresponding ATF field office. In our survey we asked IOIs how many times in the past year they had referred a federal firearms licensee to an ATF Special Agent based on a discrepancy between the NFRTR inventory report and the licensee’s inventory. Of the 298 IOIs who responded to this question, 91 percent (272) said they had made 0 referrals, 7 percent (20) had made 1 referral, 1.6 percent (5) had made 2, and less than 1 percent (1) had made 3. IOIs we interviewed emphasized that they refer cases only when an NFA weapons registration in the NFRTR cannot be established after discussions with the licensee, the NFA Branch, and extensive searches of the NFRTR or when they suspect deliberate criminal activity involving NFA weapons.
We did not find evidence that errors in NFRTR records caused inappropriate seizures or criminal charges against NFA weapons owners or federal firearms licensees. In fact, we found that few federal firearms licensees were criminally charged with NFA violations. Between 2000 and 2006, only 15 licensees were charged with violating 26 U.S.C. Chapter 53, the chapter of the Internal Revenue Code that includes the NFA. This represents only 6.5 percent of the total number of licensees (230) criminally charged with any violation.
We asked both ATF and the NFATCA (the representative organization of the NFA weapons industry), to provide us with examples or cases in which an NFRTR error resulted in a seizure of an NFA weapon or criminal consequences. Neither ATF nor the NFATCA could provide any examples. We reviewed ATF processes related to requesting records checks from the NFRTR and determined that when an error is detected, the NFA Branch staff thoroughly research the NFRTR and the imaging database to find out if a weapon is actually registered. Additionally, the NFA requires owners to retain the approved NFA weapons application form as proof of a weapon’s registration and make it available to ATF upon request. If the NFA weapons owner can produce the registration paperwork, ATF assumes the error is in the NFRTR and fixes it in the database.
However, NFA Branch staff’s errors in processing NFA weapon applications have resulted in financial loss to individuals and licensees. The NFATCA and ATF each provided an example:
The NFA Branch incorrectly approved the sale (transfer) of a machine gun from a law enforcement agency to a federal firearms licensee. The licensee subsequently tried to sell (transfer) the weapon to another licensee. However, the NFA Branch discovered its original error and subsequently disapproved both the first and second transactions. The licensee was not allowed to retain possession of the machine gun, and the law enforcement agency did not have the funds to return the $10,000 paid by the licensee for the weapon.
An NFA Branch Examiner processed an application to transfer an NFA weapon from a federal firearms licensee to another licensee. The licensee selling the weapon had purchased the weapon from a police department that had, in turn, purchased the weapon 10 years ago from an importer. The Examiner who handled the original transaction should have stamped the approved application form “restricted” because only holders of certain federal firearms licenses can possess and transfer the weapon. Because the first application form was never stamped, the licensee did not know that he could only resell the weapon to certain license holders. The NFA Branch had to disapprove the licensee’s application to sell (transfer) the weapon.
NFA Branch Action to Address Backlog of Discrepancy Reports
The NFA Branch was working to reduce the backlog of discrepancy reports to be resolved. In October 2006, the backlog was 112 reports, and by March 2007 had been reduced to 61 reports. In early 2007, the NFA Branch Chief had assigned one NFA Branch Examiner to work part-time on the backlog. This Examiner spends 50 percent of her time reconciling discrepancies, and two other staff members (a Specialist and the NFA Program Manager) reconcile inventory reports sporadically as their time permits.
The NFRTR database has technical problems, and the NFA Branch considers the programming to be flawed.
We found that ATF has not updated the programming of the NFRTR database platform, and the NFA Branch considers it to be flawed. The NFRTR’s technical flaws introduce errors in records and make it more difficult for NFA Branch staff to ensure that decisions based on NFRTR reports and queries are correct.
In 1983, ATF first created a database to track NFA weapons applications and entered information into the database from hardcopy applications received both prior to and after implementation of the database. ATF converted the first database to an Oracle platform in 1997 and has not modified it since. NFA Branch staff stated that the Oracle database is more accurate and easier to search than the old database; however, several other Branch staff described it as obsolete or becoming obsolete. For example, one Examiner described the NFRTR as “old, antiquated, and not set up well.” Another NFA Branch Examiner recommended giving the NFRTR “an IT upgrade.”
Some IOIs also expressed concern and frustration about the NFRTR in their responses to our survey. IOI comments about the NFRTR included:
“Update the computer program to a 21 st century capability.... [ATF should] stop operating like a third world Department of Motor Vehicles office.”
“Hire more people and/or invest in new technology which will enable the NFA Branch to maintain accurate and up-to-date records.”
“Revamp [the NFRTR] making it easier to verify its integrity, and spend more money on people to ensure it is maintained properly.”
The NFA Branch Program Manager said that ATF suspended making any database changes or enhancements to the NFRTR for the last 5 years because ATF had initiated the Firearms Integrated Technology (FIT) project that would encompass the NFRTR.39 FIT was intended to integrate the databases of the National Tracing Center, Firearms and Explosives Imports Branch, and NFA Branch. FIT would ensure that the data from each database was compatible for interoperability, but would not fix the underlying software programming flaws in the NFRTR. ATF ceased significant work on FIT because the funding had been reallocated and exhausted by 2004 on implementing the Safe Explosives Act.40 Any continued work on FIT was dependent on additional funding.41 Subsequent funding requests for FIT were not successful. ATF requested additional funding for FY 2008 to enhance the NFRTR, but the funding request was not included in the President’s budget.42
While several NFA Branch staff described the database as “user friendly,” they identified flaws that make it more difficult for Specialists and Examiners to ensure that decisions based on NFRTR reports and queries are correct. Flaws that impede the maintenance of accurate records and the accuracy of searches include: (1) older NFRTR records have empty data fields that can improperly exclude records from search results, (2) the NFRTR allows separate records to be generated for a single weapon, (3) the NFRTR does not have system controls over data entry, so consistent data entry is not ensured, (4) the NFRTR does not always indicate the correct owner of NFA weapons on queries and reports, and (5) when multiple NFA weapons are registered on the same application form, changes in ownership made to one of the weapon’s NFRTR record can affect the records of all of the weapons registered on that form (a problem that recurs until the weapon has been transferred from the manufacturer to two successive owners).
Older NFRTR records have empty data fields.
When the NFRTR was converted to an Oracle platform in 1997, several new fields were added, including the applicant’s date of birth, Social Security Number, Special Occupational Tax (SOT) status, business trade name, and address. Records for NFA weapons registered before 1997 do not contain data in any of the fields that were added in the 1997 conversion. In addition, the pre-1997 NFRTR database had one field for “Name,” and if the applicant had a trade name, NFA Branch staff entered only the trade name (or the name of the company) in the “Name” field and not the applicant’s name. As a result of empty fields, it is more difficult for Examiners to compile complete weapon registration histories for weapons that were registered before 1997 because there are fewer fields with data to search on; thus, NFRTR searches may not locate some relevant records.
Some NFA weapons have multiple records in the NFRTR.
NFA Branch staff stated that the NFRTR will split the record for a weapon into two separate records if any specifications of the weapon, such as the caliber or barrel length, differ in subsequent transfer applications from that weapon’s existing record in the NFRTR. When this split happens, Examiners see only part of the transfer history unless they find both parts of the record that have been stored in the NFRTR database as the records of two weapons. One Examiner described this problem by saying that “it’s easy for data to hide” in the NFRTR and “you have to be very thorough.” Another Examiner told us that sometimes when a record splits into two staff members cannot search for the second record using the weapon’s serial number, but must use the NFRTR-generated control number originally assigned to the weapon. Examiners and Specialists must be aware that more than one record could exist for the same weapon and search the NFRTR for additional records that are “hiding” under slightly different serial numbers or other characteristics. Examiners also must ensure that when they add data to the record of an NFA weapon, the record does not split into separate records for the same weapon.
The NFRTR does not have system controls over data entry, so consistency is not ensured.
The NFRTR is not programmed to control for incorrect or inconsistent data entry. Several NFA staff noted the lack of automated edits as a problem, reporting that the database allows wide variations in how data in certain fields are entered. One IOI survey respondent commented, “The NFRTR inventory [reports contain] codes or abbreviated manufacturer codes, which do not seem to resemble the actual manufacturer of the firearm.” One Examiner said that having drop-down lists for manufacturers and corresponding model numbers would reduce the chance for mistakes. For example, if an Examiner selected the Remington manufacturer code from a list, then the NFRTR should be programmed to give the Examiner only the model number choices that correspond to Remington. The NFRTR also accepts special punctuation, which makes it more difficult to query the database. For example, the NFRTR will accept the word “and” as well as the ampersand symbol. As with split records, inconsistent data entry due to the lack of built-in controls requires NFA Branch staff to perform many searches using all possible permutations of the search terms to ensure they have located the correct record.
The NFRTR does not always indicate the correct owner of weapons on queries and reports.
Many NFA Branch staff noted that the NFRTR does not always indicate the correct owner of weapons on queries and reports. The NFA Branch Program Manager stated that this problem was identified almost immediately after the new NFRTR system was deployed in 1997, but the IT staff was unable to correct the problem and ATF did not pursue resolution.
The NFRTR was designed to automatically place the most recently approved transaction at the top of a weapon’s record and to shade the information about that transaction purple to clearly identify the current owner when viewed on the computer screen. However, if a transfer of an NFA weapon is canceled after the application has been entered into the NFRTR and approved, the NFRTR will incorrectly list the transferee in the most recently approved transaction as the current owner on printouts. NFA Branch staff viewing the weapon’s record in the NFRTR can see all recent transactions associated with the weapon and easily identify the true current owner because the “status” field will indicate “void” for the transaction that was canceled, even though the incorrect owner is shaded in purple. (Staff members are trained to review the “status” field for all the transactions listed on the screen.)
Because the printed reports or queries only include the transaction shaded in purple at the top of the record, the printouts will incorrectly identify the current owner. Figure 4 shows an example of an NFRTR record of a weapon for which the most recent transfer was canceled by the applicant. Because the transfer from Robert Smith to John Doe was canceled, the true current owner is still Robert Smith; however, the purple shading indicates that John Doe is the current owner. John Doe also will be listed as the current owner on NFRTR printed queries and reports.
Ensuring the accuracy of the NFRTR record is the responsibility of the Examiner, who must manipulate the system to change the current ownership back to the actual owner, which will then move the correct transaction to the top of the weapon’s record and shade it purple. If the Examiner does not take these steps, the true current owner will not be reflected in reports printed from the NFRTR.
When multiple NFA weapons are registered on the same application form, modifications to one weapon’s record affect all of the weapons registered on that form.
Often firearms manufacturers will use the same application form to register multiple NFA weapons (sometimes hundreds), and weapons owners sometimes use the same form to register or transfer multiple NFA weapons. Even though each weapon has its own record in the NFRTR, weapons registered or transferred on the same form are initially linked by their NFRTR-generated control number. This control number is based on the form and not the weapon and applies to the records of all weapons registered on that form. The link between weapons registered on the same NFA weapon application is broken only after weapons have been transferred to new owners two subsequent times. The weapons would then have their own NFRTR-generated control numbers.
This programming flaw is most evident when a transfer of a weapon is canceled by the applicant and that weapon’s preceding transaction involved multiple weapons registered or transferred on the same form. If no action is taken to correct the record to show the true current owner, all NFRTR queries and reports will incorrectly list the transferee from the canceled transaction as the current owner. However, when an NFA Branch staff member manually fixes the record to show the correct owner of the weapon, the NFRTR will apply that change to all the weapons on the form, which are still linked by the same control number. Because it takes a significant amount of time and effort to ensure that only the relevant weapon on that record is changed, Examiners often do not fix such records.
The existence of these flaws requires NFA Branch staff to be attentive to likely errors in the NFRTR and knowledgeable about how to identify and correct them. Maintaining NFRTR accuracy depends on staff carefully and thoroughly entering data, conducting searches, and correctly interpreting search results. Examiners and Specialists do not necessarily reach the correct conclusion about a weapon’s history or registration when their searches of the NFRTR database do not take into account all possible permutations of the name or search variable. This level of inquiry requires Examiners and Specialists to conduct many NFRTR searches using different search terms and variables in an attempt to discover all of the information relevant to a registration or transfer of a particular weapon. Failure of Examiners and Specialists to thoroughly search the NFRTR in this manner can result in their forming incorrect conclusions about whether a registration or transfer should be approved or how a NFA weapon’s record should be updated.
NFA Branch Action to Address Technical Issues
The NFA Branch is beginning to address some of the errors caused by NFRTR programming flaws by creating an IT Specialist position. The NFA Branch Chief told us he wants the IT Specialist to:
Track branch productivity, application processing times by each type of form, the number of applications with pending status, and SOT reports;
Review the NFRTR database to determine its full capability, including developing additional queries; and
Determine the best approach to correcting errors in the NFRTR records.
The Chief filled the IT Specialist position in February 2007 with an NFA Branch Examiner who had information technology experience. Because of a shortage of staff, as of March 2007 the IT Specialist was still performing Examiner duties and was only conducting his IT Specialist duties part-time.
ATF has not completed two vital projects to improve the NFRTR, which limits the NFA Branch’s capability to correct or prevent discrepancies.
Because of budget constraints, ATF has not completed two projects that would improve the accuracy of the NFRTR’s records and increase the efficiency of the NFA Branch. The projects are 1) scanning all NFA transfer and registration documents into digital files, and 2) establishing an electronic filing (e-Forms) system so that applicants with access to computers can submit certain NFA transfer and registration applications online.
In its FY 2002 congressional appropriations, ATF received $500,000 specifically “ to assist in such efforts as linkage technology, electronic filing, and the use of contract employees with the aim of reducing processing times and ensuring the completeness and accuracy of the NFRTR.” ATF used the funds to supplement the contract for staff to image and index the NFA applications. ATF also used the funds to develop the requirements document for the development of an electronic filing system for NFA Forms 2, 3, and 5 and a prototype system and to modify the prototype based on feedback received from the NFA weapons industry.
ATF has a backlog of NFA weapons applications to be imaged and indexed.
We found that as of October 2006, ATF had a 1-year’s backlog worth of application forms to be imaged and indexed. The imaging database is an important parallel system to the NFRTR with the goal of ensuring that all NFA registration and transfer applications received by ATF since 1934 are searchable and retrievable. NFA Branch staff use the imaging database to easily locate specific forms when needed to process new NFA weapons applications, verify the ownership and the complete transfer history of NFA weapons, and verify whether certain weapons are or are not registered in the NFRTR. As of October 2006, all NFA documents received from 1934 through November 2005 were imaged, and two contractors were assigned to image NFA records received since then. In 2005, the NFA Branch had four contractors working on imaging and indexing and a 6‑month backlog. Budget cuts forced ATF to reduce the number of contractors from four to two in June 2005, and as of October 2006 the Branch was falling increasingly farther behind in indexing and imaging NFA weapons application forms. The NFA Branch Chief told us that the Branch needs additional imaging staff to eliminate the backlog.43 ATF did not allot additional funding for imaging NFRTR records for FY 2006 or FY 2007 because of budget constraints and competing priorities. Further, when ATF had four contractors assigned to image NFA forms, they were able to check that the information from the forms had been entered into the NFRTR correctly as they indexed each form. The contractors have not been able to perform this step since the number of contractors was reduced from four to two.
ATF has not completed the e-Forms project.
We found that since 2005, ATF has not had the funds to continue the e-Forms project it initiated in 2004. ATF anticipated that this project would reduce human errors in processing and entering NFA transfer and registration applications, detect errors on applications so that incorrect information was never entered into the NFRTR, improve communication with importers and manufacturers by providing an online method for checking the status of applications submitted electronically, and ultimately reduce the NFA Branch’s data entry burden and require less Examiner time for processing routine NFA applications.44
ATF began the e-Forms project in October 2004 (with congressionally earmarked funds as part of FIT) to allow for electronic submission of NFA Form 2 (Notice of Firearms Manufactured or Imported) and Form 3 (Application for Tax-Exempt Transfer of Firearm and Registration to Special Occupational Taxpayer). In June 2005, ATF added Form 5 (Application for Tax-Exempt Transfer and Registration of Firearm) to the project.45 Eighty-two percent of all NFA weapons applications the NFA Branch receives are on Form 2s, 3s, and 5s, and very few of them are disapproved.46 If a significant portion of Form 2s, 3s, and 5s was submitted electronically, Examiners would be able to spend more of their time resolving technical questions and processing complicated NFA weapon applications rather than routinely processing these less complex forms.
In our interviews with NFA Branch staff, several staff members mentioned that establishment of an e-Forms system would enhance the NFRTR and help ensure its reliability. One Specialist explained that “e-Forms would make things easier for the ATF and the external customer” because it would force applicants to provide standardized information and applicants would no longer have to risk forms getting lost in the mail. ATF’s Deputy Assistant Director of the Office of Enforcement Programs and Services expected that an e-Forms system would reduce human error in entering the data from the paper forms into the NFRTR.
In February 2006, ATF demonstrated the prototype of the e-Forms system at the Shooting, Hunting, and Outdoor Trade (SHOT) show, where NFA weapon buyers and sellers expressed eagerness to see it implemented.47 In our interview, a representative of the NFATCA commented on the e-Forms project saying, “I cannot emphasize enough the need for funding.” He believed that e-Forms would speed the NFA weapon application processing and approval process.
According to the Assistant Director, Office of Enforcement Programs and Services, ATF could not continue funding the project while it was still in the prototype phase because of budget constraints. ATF estimates that $13,964,870 will be needed to establish the e-Forms system and to operate it for the first 2 years and that $200,000 will be needed to operate it each year thereafter. The Assistant Director stated that ATF is working closely with the NFA weapons industry to develop alternatives for accomplishing the e-Forms project. He did not know when the project will resume but he believes it will get done because of its importance to streamlining the application process.
Between 2004 and 2006, the average processing time for all forms decreased from 30 days to 8 days. This number includes the NFA registration and transfer forms not discussed in this section. See Appendix I for a list of all NFA forms.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Inspection Report: National Firearms Act Branch (2003).
Bureau of Alcohol, Tobacco, Firearms and Explosives, Inspection Report: Firearms and Explosives Services Division (2006).
Jeff W. Zimba, “SAR Show 2006 Huge Success!” www.smallarmsreview.com/SARShow2007.htm (April 4, 2007).
John Brown, “NFATCA Report: The NFA and Forms Processing,” The Small Arms Review, Vol. 10, No. 1 (October 2006), pp. 53 – 55. John Brown, “NFATCA Report: Working with the NFA Branch,” The Small Arms Review, Vol. 10, No. 2 (November 2006), pp. 22 - 23.
Bureau of Alcohol, Tobacco, Firearms and Explosives, NFA Handbook Draft (2006).
Bureau of Alcohol, Tobacco, Firearms and Explosives, Inspection Report: Firearms and Explosives Services Division (2006).
ATF Memorandum, Processing Transfers to Native American Tribal Police Departments, Kenneth Houchens (August 21, 2006).
The NCIC is a computerized database that contains information on criminal histories, fugitives, stolen property, and missing persons. The NCIC is maintained by the Federal Bureau of Investigation and used by federal, state, and local law enforcement agencies.
Compliance inspections are conducted to ensure federal firearms licensees are complying with the GCA, NFA, and other federal firearms laws. During inspections, licensees must account for all weapons they have bought and sold, and report all multiple sales and firearms thefts to ATF. Violations of federal firearms laws include missing or incomplete sales records, selling a firearm to a minor, or not properly filling out an ATF Form 4473 (a firearms transaction record).
In 2006, the NFA Branch produced 530 NFRTR inventory reports. However, some field offices and IOIs have read-only access to the NFRTR and can print out inventory reports themselves.
Under the Firearm Owners Protection Act, part of the Gun Control Act of 1986, Congress mandated that ATF compliance inspections be done no more than once a year and, at a minimum, must be done once every 3 years. An exception to the "once a year" rule exists if multiple record-keeping violations are recorded in an inspection, in which case the ATF may do a follow-up inspection within the next 12 months. However, a previous OIG report (I-2004-005) found that most licensees are inspected infrequently or not at all. While ATF’s goal is to inspect each licensee at least once every 3 years to ensure that they are complying with federal firearms laws, ATF is currently unable to achieve that goal, partly because of resource shortfalls.
ATF told us that violations of the NFA may be included in the Report of Violations issued to an FFL without further action being taken. The specific circumstances of the case and the discretion of the ATF field office and the U.S. Attorney’s office determines whether further criminal action is taken.
The Brady Handgun Violence Prevention Act of 1993 (Brady Act) (Public Law 103-159) established the National Instant Criminal Background Check System that federal firearms dealers are required to contact before the transfer of any firearm to ensure that a person receiving a firearm is not prohibited under the GCA from possessing firearms.
ATF could not tell us exactly how many of the total number of federal firearms licensees inspected actually have NFA weapons in their inventories, but estimates the number as low.
During the times when work was actively going on with the integration project, any other maintenance or development work was halted because ATF’s information technology security will not allow two different contractors to work on one application at the same time.
The Safe Explosives Act, enacted on November 25, 2002, expanded the ATF’s licensing authority to include the intrastate manufacture, purchase, and use of explosives. The act required ATF to inspect licensees’ manufacturing and storage facilities at least once every three years and to conduct background checks on all licensees, as well as all employees who have access to explosives as part of their work.
At the point when congressionally earmarked funds where exhausted during 2005, ATF had completed the Functional Requirements Analysis and developed a prototype for converting three hard copy forms to electronic forms for the NFRTR.
ATF funded the development of FIT through congressional appropriations in FY 2001 and FY 2002. In FY 2001, Congress appropriated $2 million for NFA Branch, National Licensing Center, and Imports Branch IT improvements. ATF apportioned this money to three initiatives within the FIT Project that were intended to standardize and integrate data from the NFA Branch, Imports, and the National Licensing Center. In FY 2002, Congress allocated another $2 million for the FIT Project.
The contract covering imaging and indexing is managed by the National Tracing Center. In 2005, 47 imaging contractors were laid off and were not replaced, and as a result the number of contractors assigned to the NFA Branch was reduced.
Bureau of Alcohol, Tobacco, Firearms and Explosives, NFA and e-Forms Functional Requirements Document (December 19, 2005).
The Functional Requirements Document for the e-Forms project explained that the electronic submission for Form 5 applications would only apply to federal firearms licensee-to-government transactions because transactions to non-licensees require the applicants to submit photographs and fingerprint cards. Creating a secure way for those documents to be submitted electronically was beyond the scope of the project, so paper forms were to continue to be used for such transactions.
In 2006, 45.7 percent (183,932) of the forms the NFA Branch received were Form 2s, 12.7 percent (50,971) were Form 3s, and 23.47 percent (94,367) were Form 5s. Of these, the NFA Branch disapproved 8 Form 2s, 95 Form 3s, and 94 Form 5s.
The SHOT Show, sponsored by the National Shooting Sports Foundation, is one of the largest trade shows for the shooting sports and hunting industries. It includes expositions of firearms, ammunition, archery, outdoor apparel, optics, camping and related products and services.
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