Executive Summary

 Audit of the
Handling of Firearms Purchase Denials Through the National Instant Criminal
Background Check System, September 2016
[66 Pages, 4.3MB]

The National
Instant Criminal Background Check System (NICS) is used by Federal Firearms
Licensees, importers, and manufacturers (collectively, “dealers”) to determine
whether a prospective purchaser is legally prohibited from doing so. The
process begins when the person provides a dealer with photo identification and
a completed Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Form
4473. The form asks questions corresponding to the categories of persons
prohibited by federal law from possessing firearms. Providing false information
is a federal crime.

If a
prospective purchaser answers “yes” to any questions, the sale must be denied.
Otherwise, the dealer generally must request a NICS check from the Federal
Bureau of Investigation (FBI) or their state point of contact. The transfer can
occur only if the check does not identify prohibitive criteria, or if it takes
more than 3 business days. If 3 business days pass without a determination that
the transaction can be approved or must be denied, the dealer can either
complete the sale (unless prohibited by local law) or wait for the check to be

For approved
transactions, identifying information about the purchaser and firearm is purged
from NICS within 24 hours pursuant to federal law. For denied transactions, the
FBI sends relevant information to ATF’s Denial Enforcement and NICS
Intelligence (DENI) Branch for possible investigation. For a “delayed denial,”
where a firearm transfer to a prohibited purchaser occurred because the check
took more than 3 business days to complete, ATF is charged with recovering the
firearm. Additionally, ATF consults with U.S. Attorneys’ Offices (USAO) to
decide whether to refer for possible prosecution denial cases that it believes
have prosecutorial merit.

Department of Justice (DOJ) Office of the Inspector General (OIG) undertook
this audit to examine (1) the effectiveness of the FBI’s quality control
processes for NICS transactions, the impact of state reporting and recording on
FBI NICS determinations, and the FBI’s referral of denied NICS transactions to
ATF; (2) ATF’s initial screening and referral of denied transactions to its
field offices for investigation, and ATF field offices’ investigation of denied
transactions; and (3) the USAOs’ prosecution of crimes associated with denials.
FBI Processing of NICS Requests We found the FBI generally has an effective
internal control system and quality control process.

processed more than 51 million NICS transactions from 2008 to 2014, and
approved or denied about 50 million of them (state authorities processed more
than 68 million requests during the same period). The FBI denied 556,496 of
these transactions. The FBI told us its quality control process results in an
accuracy rate that ranges from 99.3 percent to 99.8 percent.

judgmentally selected 447 denied transactions and found that only 1 transaction
was incorrectly denied, resulting in a 99.8 percent accuracy rate.1 We also
reviewed NICS requests that remained open at the FBI on the 88th calendar day
without an approval or a denial because federal regulation requires that
unresolved requests be purged from NICS prior to the 90th calendar day. Of the
roughly 42 million transactions the FBI processed from fiscal year (FY) 2008 to
FY 2013, the FBI purged slightly more than 1 percent due to lack of approval or
denial within 90 days. We reviewed 384 of these transactions and determined the
FBI appropriately followed its processes in 375 of them (97.7 percent) and
committed errors in 9.

We also
assessed instances where a delayed denial, an incorrect approval that was
discovered within 24 hours, or other errors by the FBI may have resulted in a
firearm transfer to a prohibited person. We identified 1,092 transaction
records that were marked to indicate the FBI denied the transaction within 3
business days and also that ATF retrieval may be required. We judgmentally
selected 306 out of the 1,092 transactions. For 241 of them, we determined the
FBI appropriately followed its processes, or the errors did not affect
operations. However, for 6 transactions, we found that while the FBI recorded
denials internally within 3 days, the denial was not communicated to dealers
until from 1 day to more than 7 months after the denial. Additionally, we found
that 59 transactions were initially approved by the FBI but should have been

The FBI’s
quality control checks identified and corrected 57 of these errors as a part of
its internal review process. Although we found the overall FBI error rate was
exceedingly low, even an isolated NICS process breakdown can have tragic
consequences, as evidenced by the June 2015 fatal shooting at a Charleston,
South Carolina church, where the NICS process, with timely and accurate data
from local agencies, could have prevented the alleged shooter from purchasing
the gun he allegedly used.

A subsequent
FBI Inspection Division (INSD) report attributed primary responsibility for the
delay that allowed the firearm to be transferred to untimely responses and
incomplete records at various state and local agencies that feed into NICS, a
problem we identified more generally in our review.

review also determined that a check of the National Data Exchange (N-DEX), an
FBI-developed repository of unclassified criminal justice records, would have
revealed a prohibiting incident report for the alleged shooter, leading INSD to
recommend the FBI seek to identify and review additional database resources or
stakeholders both internal and external to the FBI. FBI officials told us that
its NICS Section would need law enforcement approval (by way of the Advisory
Policy Board) and a regulation change (28 CFR Part 25) in order to access N-DEX
to conduct firearm background checks.

We also
found that a number of errors were not caught due to weaknesses in the FBI’s
system for following up on pending transactions. For example, the NICS system
does not have a tracking process to ensure that external research requests are
made in a timely manner for each open transaction, requested information is
received and evaluated in a timely manner, and further research is conducted
when needed.

The FBI told
us it intends to implement an automated feature in the new NICS system to send
second requests for information to agencies that do not respond in the first
instance, but it does not yet have an implementation date for this feature.
Information from State NICS Checks From 2008 through 2014, states handled about
68 million of the more than 119 million NICS transactions. To help ensure the
completeness of the NICS database, states are required to update it with
supporting documents when a prospective purchaser attempts to buy a firearm and
is approved, denied, or delayed.

We reviewed
a judgmental sample of 631 state processed transactions and determined that in
630 of them the states did not fully update the NICS database or inform the FBI
of the transaction’s outcome. These failures mean the NICS database is
incomplete, and increases the risk that individuals found by states to be
prohibited purchasers could be able to purchase firearms in the future. ATF
Handling of NICS Denials We found ATF’s controls generally have enabled it to
appropriately process denials and refer them to the proper field division for

determined the ATF DENI Branch processed 99 percent of the 447 FBI referrals we
reviewed in accordance with its policy. To assess ATF’s firearm recoveries, we
reviewed field divisions’ retrieval efforts for 125 firearms needing recovery
from our sampled transactions previously discussed. We determined ATF recovered
116 of those firearms, including all firearms inappropriately transferred due
to FBI error, and that ATF made reasonable attempts to recover 8 of the 9
remaining firearms. Our audit also revealed a group of NICS transactions the
FBI denied but ATF believed should have been approved because of a disagreement
regarding the definition of a “Fugitive from Justice,” a category that
disqualifies prospective gun purchasers.

disagreement was referred to the Department’s Office of Legal Counsel (OLC) in
2008, and OLC provided informal advice in July 2008. In August 2010, the FBI
requested formal reconsideration of that advice, but 6 years later OLC still
has not rendered a decision. We believe this issue should be addressed as soon
as possible. Of those transactions that were denied by the FBI in this category
from November 1999 through May 2015, there were 49,448 instances in which ATF
did not agree with the FBI’s denial determination. ATF tracked these cases as
FBI denials but, because ATF did not agree with that determination,
ATF did not attempt to recover the firearm in the 2,183 instances in which
the firearm was transferred.

Related to NICS Denials We found that the number of NICS denial prosecutions
has dropped substantially since FY 2003, when 166 subjects were accepted for
consideration of prosecution. Between FY 2008 and FY 2015, an 8 year period,
ATF formally referred 509 NICS denial cases that included 558 subjects to USAOs
for possible prosecution. The USAOs accepted for consideration of prosecution
254 subjects (or less than 32 subjects per year), declined to prosecute 272
subjects, and decisions for 32 were pending at the time of our review.

determined that, in general, USAOs most often prosecuted NICS denial cases when
aggravated circumstances existed in addition to the prospective purchaser’s
false “no” answer to at least one question on the Form 4473. An Executive
Office for U.S. Attorneys (EOUSA) official told us and the Department confirmed
in response to a draft of this report that their decisions reflected the
application of the principle of the Department’s Smart on Crime Initiative that
directs USAOs to prioritize prosecutions to focus on the most serious cases
that implicate the most substantial federal interests. After the school shooting
in Sandy Hook, Connecticut, the White House issued a report in January 2013
titled “Now is the Time: The President’s Plan to Protect our Children and our
Communities by Reducing Gun Violence.”

One part of
the multi-tiered plan, entitled “[m]aximize enforcement efforts to prevent gun
violence and prosecute gun crime,” stated that the Attorney General would ask
U.S. Attorneys to consider whether additional efforts would be appropriate in
areas such as the prosecution of felons who illegally seek to obtain a firearm,
and persons who attempt to evade the NICS system by providing false
information. When we asked what the Attorney General did in response to the
President’s plan, EOUSA explained that it provided U.S. Attorneys with two
Presidential Memoranda, one on firearms tracing and one on improving records
availability to NICS. However, these two memoranda addressed other parts of the
“Now is the Time” plan and did not relate directly to the “maximize[ing]
enforcement efforts” provision.

in response to a draft of this report, the Department stated that the Attorney
General spoke with the U.S. Attorneys about the President’s plan on the
afternoon of January 16, 2013, the date the President announced his plan. In
addition, the Department noted that two U.S. Attorneys testified before
Congress in February 2013 that, while the Department would prosecute
particularly egregious false “no” cases arising from NICS denials, it would
prioritize prosecuting prohibited persons who actually obtained guns illegally
as opposed to those who attempted to purchase a firearm by making false
statements during the background process but were unsuccessful.

EOUSA also
provided the OIG with a White House Fact Sheet stating that on January 6, 2016,
Attorney General Lynch instructed U.S. Attorneys to “continue to focus their
resources – as they have for the past several years under the Department’s
Smart on Crime initiative – on the most impactful cases, including those
targeting violent offenders, illegal firearms traffickers, and dangerous
individuals who bypass the background check system to acquire weapons

We found
that the number of NICS cases arising from denials prosecuted annually by the
Department has not changed significantly since the President’s plan was issued,
declining slightly from 24 in FY 2013 to 15 in FY 2014 and 20 in FY 2015,
though the numbers of such cases remain extremely low compared to the overall
number of federal firearms prosecutions.

In response
to a draft of this report, EOUSA provided the OIG with FY 2016 data reflecting
that overall number of firearms cases filed were projected to rise 4.3 percent
over the average from FY 2012 through FY 2015, and that the percentage of
firearms defendants as a share of the overall number of federal defendants
would rise from 13.9 percent to a projected 15.7 percent during the same
period, all of which it indicated reflected the Department’s prioritization of
firearms prosecutions generally. The Department further indicated that it
believes that it has consistently and appropriately prioritized the most
impactful firearms prosecutions, and that at present there is no reason for it
to reconsider its approach to NICS false “no” cases.

Inspector General Report

 Audit of the
Handling of Firearms Purchase Denials Through the National Instant Criminal
Background Check System, September 2016
[66 Pages, 4.3MB]