Report to the Chairman, Subcommittee

on Oversight of Government

Management, Restructuring, and the

District of Columbia, Committee on

Governmental Affairs, U.S. Senate

United States General Accounting Office

GAO

July 2002 GUN CONTROL

Potential Effects of

Next-Day Destruction

of NICS Background

Check Records

GAO-02-653
Page i GAO-02-653 Next-Day Destruction of NICS Records

Letter 1

Results in Brief 3

FBI Plans Would Address Most Potential Effects of Next-Day

Destruction of Records 5

Next-Day Destruction of Records Would Affect Nonroutine Audits

and Related Support to Law Enforcement 6

Next-Day Destruction of Records Would Have Public Safety

Implications 8

Next-Day Destruction of Records Could Lengthen Time Needed to

Complete Background Checks 14

Next-Day Destruction of Records Would Lessen the FBI’s Ability to

Respond to Inquiries 15

Effect of a Next-Day Destruction Policy on ATF Inspections of Gun

Dealer Records is Unclear 16

Agency Comments 18

Appendix I Retention of National Instant Criminal Background

Check Records 21

History of NICS Records Retention Periods 21

DOJ’s Current Notice of Proposed Rulemaking 24

Appendix II Objectives, Scope, and Methodology 30

Objectives 30

Scope and Methodology of our Work 31

Appendix III Comments from the Department of Justice 34

Table

Table 1: Number of Calendar Days Taken to Identify NICS Proceed

Transactions That Should Have Been Denied (July 3, 2001,

through Jan. 2, 2002) 9

Abbreviations

ATF Bureau of Alcohol, Tobacco and Firearms

DOJ Department of Justice

FBI Federal Bureau of Investigation

NICS National Instant Criminal Background Check System

Contents
Page 1 GAO-02-653 Next-Day Destruction of NICS Records

July 10, 2002

The Honorable Richard J. Durbin

Chairman, Subcommittee on Oversight of Government

 Management, Restructuring, and the District of Columbia

Committee on Governmental Affairs

United States Senate

Dear Mr. Chairman:

This report responds to your request for information about how the

Federal Bureau of Investigation’s (FBI) National Instant Criminal

Background Check System (NICS) would be affected if records related to

sales of firearms by licensed dealers were destroyed within 24 hours after

the transfers were allowed to proceed.1

 Under the Brady Handgun

Violence Prevention Act, licensed dealers generally are not to transfer

firearms to an individual until a NICS search determines that the transfer

will not violate applicable federal or state law.2

 For instance, persons

prohibited by federal law from receiving a firearm include convicted

felons, fugitives, unlawful drug users, and aliens illegally or unlawfully in

the United States. However, if the background check is not completed

within 3 business days, the dealer is not prohibited from transferring the

firearm.

Under current NICS regulations, records of “allowed” firearms sales can

be retained for up to 90 days in a computer database (i.e., the NICS audit

log) after which the records must be destroyed.3

 The audit log contains

information related to each background check requested by a licensed

firearms dealer, including the NICS response (e.g., proceed or denied) and

the history of all activity related to the transaction. According to the NICS

regulations, information on allowed firearms sales is used only for

purposes related to ensuring the proper operation of the system or

 1

We provided you preliminary information on this issue earlier this year. See U.S. General

Accounting Office, Preliminary Information on Proposal for Next-Day Destruction of

Records Generated by the National Instant Criminal Background Check System,

GAO-02-511R (Washington, D.C.: Mar. 11, 2002).

2

Brady Handgun Violence Prevention Act, Public Law 103-159, 107 Stat. 1536 (1993).

3

28 C.F.R. § 25.9(b)(1).

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-653 Next-Day Destruction of NICS Records

conducting audits of the use of the system. Operational uses include

evaluating system performance, identifying and resolving operational

problems, generating statistical reports, and supporting the appeals

process. System audits, in general, are designed to (1) monitor internal

employee performance and adherence to established procedures and (2)

discover misuse, e.g., unauthorized checks, or avoidance of the system.

On July 6, 2001, the Department of Justice (DOJ) published proposed

changes to the NICS regulations4

 that would reduce the maximum

retention period from 90 days to less than 1 day for records of allowed

firearms sales.5

 According to DOJ, the proposed changes balance the

legitimate privacy interests of law-abiding firearms purchasers and the

department’s obligation to enforce federal laws to prevent prohibited

persons from purchasing firearms. The proposed next-day destruction

policy would not apply to firearms sales that are allowed to proceed by

default. Rather, records related to these “unresolved” transactions could

continue to be retained for up to 90 days. Appendix I contains additional

information about retention of NICS records and DOJ’s proposed changes

to the current NICS regulations.

As agreed with your office, we studied the effects that next-day

destruction of records would have on NICS operations and system audits.

This report provides an overview of the extent to which the FBI’s planned

changes to NICS operations and routine system audits6

 address the effects

of the proposed next-day destruction policy. Also, in more detail, this

report discusses the effects such a policy would have on (1) nonroutine

system audits and related support to law enforcement agencies; (2)

specific aspects of NICS operations, including the FBI’s ability to initiate

firearm-retrieval actions, the time needed to complete background checks,

and the FBI’s ability to respond to inquiries about completed checks; and

 4

66 Fed. Reg. 35,567 (2001) (proposed July 6, 2001).

5

Generally, the proposed changes to the NICS regulations would require next-day

destruction of records. More specifically, the proposed changes would require that records

related to allowed firearms transfers be destroyed before the start of the next business day

following the date on which a “proceed” message allowing the transfer was received by the

licensed dealer that requested the NICS search. According to an FBI official, the term

“business day” should be interpreted as the NICS operational day, which starts at 8:00 a.m.

and runs until 1:00 a.m. NICS operates every day of the year except Thanksgiving and

Christmas day.

6

For this report, we define routine system audits as regularly scheduled audits conducted

by the NICS Program Office’s Internal Assessment Group.
Page 3 GAO-02-653 Next-Day Destruction of NICS Records

(3) the ability of the Bureau of Alcohol, Tobacco and Firearms (ATF) to

inspect gun dealer records.

Our work focused on NICS background checks conducted by the FBI—

and not those conducted by a state agency—because states that conduct

NICS checks generally have their own retention laws that may not be

affected by a federal next-day destruction policy.7

 However, such a policy

would affect states that do not have their own retention laws. In

performing our work, we interviewed officials from the FBI and ATF, and

we reviewed documentation they provided us. We also reviewed

applicable NICS regulations and policy guidance related to uses of the

audit log. It is important to note that the proposed revisions to the current

NICS regulations, as well as the FBI’s current plans for operating under a

next-day destruction policy, could change before the final regulations are

published. Such changes could affect the information contained in this

report. We performed our work from August 2001 to May 2002 in

accordance with generally accepted government auditing standards. Our

scope and methodology is discussed in greater detail in appendix II.

While routine system audits may not be adversely affected by DOJ’s

proposed requirement for next-day destruction of records, other current

uses of NICS records would be affected, with consequences for public

safety and NICS operations. The FBI is considering certain actions to

mitigate these effects but these actions would not cover all consequences.

The FBI has drafted plans that would address most potential effects of the

proposed policy for next-day destruction of records. In developing these

plans, the FBI reviewed each area of NICS operations and identified the

changes needed in computer systems, work processes, policies, and

procedures.8

 According to NICS officials, under the FBI’s plans, most areas

of NICS operations would not be adversely affected. The FBI’s plans also

show that many routine audits currently conducted monthly or quarterly—

such as audits of the accuracy of NICS examiners’ decisions—would have

 7

Depending on the willingness of their state government to act as a NICS liaison, firearms

dealers contact either the FBI or a designated state agency to initiate background checks

on individuals purchasing firearms.

8

In an earlier report, we provided a detailed overview of NICS operations. See U.S. General

Accounting Office, Gun Control: Implementation of the National Instant Criminal

Background Check System, GAO/GGD/AIMD-00-64 (Washington, D.C.: Feb. 29, 2000).

Results in Brief
Page 4 GAO-02-653 Next-Day Destruction of NICS Records

to be conducted on a real-time (hourly or daily) basis by adding more staff

and changing procedures. NICS officials told us, however, that the FBI

would not lose any routine audit capabilities under the proposed policy for

next-day destruction of records.

On the other hand, a next-day destruction policy would adversely affect

certain nonroutine audits of the system. Specifically, under current DOJ

policy, if a law enforcement agency has information that indicates that an

individual is prohibited from purchasing firearms under federal law, the

agency may request that the FBI check whether the name appears in NICS

records of allowed transfers. If the FBI finds a record showing an allowed

transfer to a “prohibited person” (e.g., a transfer to an alien who is illegally

or unlawfully in the United States), that record indicates a potential

violation of law, and the FBI may disclose the record to the appropriate

law enforcement entity. These audits of the accuracy of responses given

by NICS, and the additional (secondary) benefit of assisting law

enforcement investigations, generally would not be possible under a nextday destruction policy.

Also, a next-day destruction policy would adversely affect some aspects of

current NICS operations, which would have public safety implications and

could lessen the efficacy of current operations. Regarding public safety,

the FBI would lose certain abilities to initiate firearm-retrieval actions

when new information reveals that individuals who were approved to

purchase firearms should not have been. Specifically, during the first 6

months of the current 90-day retention policy, the FBI used retained

records to initiate 235 firearm-retrieval actions, of which 228 (97 percent)

could not have been initiated under the proposed next-day destruction

policy.9

 Also, a next-day destruction policy could lengthen the time needed

to complete background checks and place additional burdens on law

enforcement agencies, including state and local courts, because NICS

examiners, while researching new transactions, may have to make repeat

calls for information that otherwise would have been retained in audit log

records. Furthermore, the FBI would be less able to respond to (1) gun

dealer questions about completed transactions and (2) purchaser and

congressional questions related to the NICS appeals process, because

 9

The 235 firearm-retrieval actions involved transactions in which the FBI initially gave gun

dealers affirmative responses that the transfers could proceed but subsequently changed to

denials. As discussed later in this report, the vast majority of all retrieval actions initiated

by the FBI—including those related to transactions that are allowed to proceed by

default—would not be affected by the proposed next-day destruction policy.
Page 5 GAO-02-653 Next-Day Destruction of NICS Records

information on allowed firearms transfers may not be available at the time

of inquiry. The FBI is considering actions that could partially mitigate the

adverse effects of a next-day destruction policy on NICS operations.

Finally, ATF headquarters officials told us that a next-day destruction

policy would not affect ATF’s ability to inspect gun dealer records.

However, our work indicates that the effect of such a policy on ATF

inspections is unclear. For example, under the proposed next-day

destruction policy, NICS records of allowed firearms transfers would no

longer be available for a detailed comparison with dealer records of the

purportedly same transactions. Officials at the five ATF field offices we

contacted provided mixed views on the value of current comparisons of

NICS records with gun dealer records. If the proposed next-day

destruction policy is implemented, ATF plans to replace the detailed

comparisons with a “recheck” procedure, under which ATF inspectors

would request that the FBI rerun selected NICS checks based on

information taken from gun dealer records.

On June 24, 2002, in commenting on a draft of this report, DOJ said that

our primary concern regarding a possible inability to retrieve a relatively

small number of erroneously transferred firearms was unfounded because

(1) DOJ is considering an option to retain the federal firearms dealer’s

identification number for 90 days and (2) ATF has ample investigative

avenues for retrieving firearms. We disagree; our analysis indicates that

these may be only partial solutions.

To analyze and address the potential effects of the proposed requirement

for next-day destruction of audit log records, the FBI reviewed all areas of

NICS operations and has developed or is considering many operational

and procedural changes. More specifically, the FBI has prepared a draft

“concept of operations” document, which discusses the changes that

would be needed in the NICS program. The document addresses

applicable changes and modifications needed in computer systems and

work processes, as well as policies and procedures. For example, the draft

addresses computer system and procedural changes needed to purge NICS

audit log records, work process changes needed to monitor examiner

performance, and procedural changes needed to process appealed NICS

transactions. According to NICS officials, under the FBI’s draft plans, most

areas of NICS operations would not be adversely affected.

The FBI also has reviewed the types of routine system audits conducted by

the NICS Program Office’s Internal Assessment Group to determine how

FBI Plans Would

Address Most

Potential Effects of

Next-Day Destruction

of Records
Page 6 GAO-02-653 Next-Day Destruction of NICS Records

these audits would be affected by the proposed next-day destruction of

audit log records.10 As a result of this review, the FBI plans to modify

existing audit procedures, combine current audits for efficiency, and

develop new audits. The FBI also determined that many of the audits

would have to be conducted on a real-time (hourly or daily) basis, versus

the current monthly or quarterly basis. Such audits include assessments of

examiners’ decisions to allow firearms transfers to proceed and analyses

of the processing of appealed transactions. The FBI plans to add 10 staff

members to conduct these real-time audits, which would bring the total

number of audit staff to 19. According to NICS officials, by modifying audit

procedures, changing audit schedules, and increasing the number of audit

staff, the Internal Assessment Group will not lose any routine audit

capabilities under the proposed next-day destruction of records.

While the NICS Internal Assessment Group may not lose routine audit

capabilities under next-day destruction of records, such a policy would

affect certain nonroutine audits of the system. Without these nonroutine

audits, the FBI would be less able to assist law enforcement investigations.

Specifically, if a law enforcement agency has information that indicates

that an individual is prohibited from purchasing firearms under federal

law, the agency may request that the FBI check whether the name appears

in NICS records of allowed transfers. Under current processes, if the FBI

finds a record showing an allowed transfer to a prohibited person (e.g., a

transfer to an alien who is illegally or unlawfully in the United States), that

record indicates a potential violation of law, and the FBI may disclose the

record to the appropriate law enforcement entity responsible for

investigating, prosecuting, or enforcing that law. An FBI official told us

that performing such checks has been a longstanding practice used to

audit the accuracy of responses given by NICS, with the additional

(secondary) benefit of assisting law enforcement investigations.

Following the September 11 terrorist attacks, DOJ’s Office of Legal

Counsel issued a legal opinion that supported this longstanding FBI

practice.11 The October 1, 2001, legal opinion noted that checking names of

 10In general, the Internal Assessment Group uses the audit log to obtain a list of

transactions worked by each examiner, from which samples are selected for a review of

compliance with NICS policies and procedures.

11The legal opinion was conveyed in a memorandum from DOJ’s Office of Legal Counsel to

DOJ’s Office of Legal Policy.

Next-Day Destruction

of Records Would

Affect Nonroutine

Audits and Related

Support to Law

Enforcement
Page 7 GAO-02-653 Next-Day Destruction of NICS Records

known prohibited persons against audit log records of allowed transfers

provides a check on the accuracy of responses being given by the system

and, thus, constitutes an examination and verification of the system’s

records and the accuracy with which they are being handled. In explaining

the rationale for permitting the FBI to conduct such checks, the legal

opinion also noted the following:

“We gather that although the checking of names the FBI has in mind will serve the purpose

of auditing the NICS, the more immediate purpose is assisting the investigation of the

September 11, 2001 terrorist attacks. Assisting criminal investigations generally is not one

of the purposes for which the NICS regulations authorize the FBI to use audit log records.

Nonetheless, we see nothing in the NICS regulations that prohibits the FBI from deriving

additional benefits from checking audit log records as long as one of the genuine purposes

for which the checking is carried out is the permitted purpose of auditing the use of the

system. That the NICS has been using this method of auditing the system all along suggests

to us that this method is more than simply a cover for using audit log records for a purpose

other than those authorized by the NICS regulations.”

According to an FBI official, on October 17, 2001, DOJ’s Office of Legal

Policy informed the FBI that DOJ was reviewing the legal opinion and

instructed the FBI to refrain from accessing information in the NICS audit

log for investigatory purposes pending the outcome of the review. The

official told us that, in late-December 2001, the Office of Legal Policy

notified the FBI that, consistent with the legal opinion, a search of

information in the NICS audit log could be conducted with regard to

known prohibited persons for auditing purposes. The FBI does not

maintain data on how often law enforcement agencies request NICS

checks on known prohibited persons, but the FBI official told us that such

inquiries frequently occur. The official noted, however, that performing

such checks generally would not be possible given next-day destruction of

records.
Page 8 GAO-02-653 Next-Day Destruction of NICS Records

The proposed policy requiring next-day destruction of NICS records would

lessen the FBI’s ability to initiate firearm-retrieval actions involving

transactions the FBI initially allowed to proceed but subsequently changed

to denials.12 Specifically, during the first 6 months of the current 90-day

retention policy, the FBI used retained records to initiate 235 firearmretrieval actions related to reversed transactions, of which 228 (97

percent) could not have been initiated under the proposed next-day

destruction policy.13 Such a policy also would have affected other NICS

transactions in which firearms could have been transferred but were not.

Further, procedures designed to help NICS identify prohibited persons

who may be in possession of firearms would be adversely affected by nextday destruction of records.

According to NICS officials, after the FBI informs a gun dealer that a

firearm transfer may proceed, the FBI may receive information from a

court, law enforcement agency, or other source that would prohibit the

individual from possessing a firearm. In such cases, after a NICS examiner

confirms the prohibiting factor, the audit log record showing the allowed

firearm transfer is changed to a denial. Available records (retained under

the current 90-day retention policy) are then used to (1) identify and

contact the gun dealer to verify whether a firearm was actually transferred

to the prohibited person and, if so, (2) notify the local police department—

as determined by the purchaser’s address—and ATF. In each of these

instances, ATF guidance requires that ATF open an investigation and

coordinate attempted retrieval of the firearm with state or local law

enforcement to ensure public safety.

During the first 6 months of the current 90-day retention policy—July 3,

2001, through January 2, 2002—the FBI initiated 235 firearm-retrieval

actions based on information received after NICS examiners initially

 12Under federal law, persons are prohibited from receiving a firearm if they (1) have been

convicted of, or are under indictment for, a felony; (2) are a fugitive from justice; (3) are

unlawful drug users or are addicted to a controlled substance; (4) have been involuntarily

committed to a mental institution or judged to be mentally defective; (5) are aliens illegally

or unlawfully in the United States, or certain other aliens admitted under a nonimmigrant

visa; (6) have been dishonorably discharged from the military; (7) have renounced their

U.S. citizenship; (8) are under a domestic violence restraining order; or (9) have been

convicted of a misdemeanor crime of domestic violence. See 18 U.S.C. § 922(g) and 922(n).

13FBI data show that the FBI processed a total of about 2.6 million NICS transactions

during this 6-month period.

Next-Day Destruction

of Records Would

Have Public Safety

Implications

Retained Records Were

Used to Initiate FirearmRetrieval Actions
Page 9 GAO-02-653 Next-Day Destruction of NICS Records

allowed the transfers to proceed.14 FBI data on these 235 retrieval actions

show that an average of 34 calendar days elapsed between the FBI’s initial

decision to allow the transfers to proceed and the date that the FBI

reversed the transactions to denials. As table 1 shows, of the 235

transactions,

• 7 (3 percent) were reversed in less than 1 calendar day, the amount of

time records would be maintained under the proposed next-day

destruction of NICS records;

• 116 (49 percent) were reversed in 30 calendar days or less; and

• 192 (82 percent) were reversed in 60 calendar days or less.

Table 1: Number of Calendar Days Taken to Identify NICS Proceed Transactions

That Should Have Been Denied (July 3, 2001 through Jan. 2, 2002)

Transactions Cumulative transactions

Time to deny

transaction Number Percent Number Percent

Less than 1 day 7 3% 7 3%

1 to 10 days 46 20 53 23

11 to 20 days 37 16 90 38

21 to 30 days 26 11 116 49

31 to 40 days 26 11 142 60

41 to 50 days 33 14 175 74

51 to 60 days 17 7 192 82

61 to 70 days 25 11 217 92

71 to 80 daysa18 8 235 100

Total 235 101% - -

Note: Percentages do not add to 100 due to rounding.

a

Currently, NICS records of allowed firearms transfers are subject to a 90-day retention period.

However, in order to maintain 10 full days of backup data without violating the 90-day retention

period, NICS purges all “proceed” data from the on-line system after 80 days.

Source: GAO analysis of FBI data.

As shown in table 1, the FBI reversed 7 (3 percent) of the 235 transactions

from proceeds to denials in less than 1 calendar day. Thus, firearmretrieval actions related to these 7 transactions would not have been

 14FBI data show that 43 (18 percent) of the 235 transactions that resulted in firearmretrieval actions involved NICS examiner errors (e.g., failure to research a criminal history

record). According to FBI officials, additional examiner training will be provided and other

actions are planned to prevent such errors from occurring in the future.
Page 10 GAO-02-653 Next-Day Destruction of NICS Records

affected if the proposed policy requiring next-day destruction of records

had been in place. However, a large majority—228 (97 percent) of the 235

transactions—would have been affected by such a policy. More

specifically, under the proposed next-day destruction policy, records

related to the 228 transactions would have been destroyed before the FBI

received the information that was used to reverse the transactions to

denials. As a result, according to NICS officials, the FBI could not have

initiated firearm-retrieval actions related to these 228 transactions.15 NICS

officials provided the following examples:

• In September 2001, a man had his firearm purchase delayed while a

NICS examiner researched several criminal history charges, all of

which were found to be nondisqualifying misdemeanors. Finding no

prohibiting record, the examiner advised the gun dealer that the

transaction could proceed. The same individual attempted to purchase

another firearm in October 2001 and was again delayed. The NICS

examiner researching the second transaction found a protection order

(a prohibiting record) in a criminal history database that had been

issued in January 2001 but had not been posted to the database at the

time the FBI allowed the first firearm transfer to proceed. The

examiner denied the second transaction, and a firearm-retrieval action

was initiated for the first transaction.

• In November 2001, a woman whose criminal history record showed an

arrest for third-degree domestic battery had her firearm purchase

delayed while a NICS examiner researched the charge. The examiner

contacted a municipal court and a local police department to obtain

additional information, including the relationship of the parties

involved in the incident. The court responded that the woman was

convicted but that the charge was not domestic-violence related.

Because of this information, the examiner advised the gun dealer that

the transaction could proceed. Three days later, the examiner received

the police report on the incident, which showed that the assault was on

the woman’s husband. A firearm-retrieval action was initiated.

According to DOJ’s Office of Legal Policy, the problem of erroneous

firearms transfers stems from incomplete or inaccurate criminal history

 15FBI data show that 90 (39 percent) of the 228 firearm-retrieval actions were initiated

based on criminal history records showing felony indictments or convictions, 58 (25

percent) of the retrieval actions were related to domestic violence issues (misdemeanor

convictions or restraining orders), and 28 (12 percent) involved wanted persons. The

remaining 52 firearm-retrieval actions involved other prohibiting categories.
Page 11 GAO-02-653 Next-Day Destruction of NICS Records

records and will diminish as the states improve their criminal record

systems. The office noted that DOJ’s National Criminal History

Improvement Program will award $39 million to the states in fiscal year

2002 to improve their record systems, and, for fiscal year 2003, the

President’s budget requests $63 million for this purpose. The office also

noted that the Attorney General has directed the Bureau of Justice

Statistics to study and recommend ways to target these grants to improve

the accuracy of criminal history records, as well as records relating to

adjudicated mental incapacity and domestic violence.

While states are continuing to automate and otherwise improve the

completeness and accessibility of their criminal history records, this

process has been ongoing since the early 1990s and is still far from

complete. For example, during fiscal years 1995 through 2001, the National

Criminal History Improvement Program provided over $350 million in

grant funds to assist states to improve the quality and accessibility of their

criminal history records. However, according to a recent Bureau of Justice

Statistics report,16 as of July 2001, a total of about 64 million records were

held in state criminal history repositories, of which an estimated 23 million

(36 percent) were not accessible to the FBI for NICS checks.

According to DOJ’s Office of Legal Policy, in the transition period while

the states perfect their record systems, DOJ will try to ensure that firearms

transferred erroneously can be properly retrieved. One option under

consideration—as part of the proposed policy for next-day destruction of

records—is to retain the firearms dealer’s identification number for 90

days, as well as the NICS transaction number and the date of the

transaction, which are kept indefinitely. Under this option, DOJ explained

that (1) when a state agency or other external source provides information

showing that a proceed was given in error, the FBI could use the NICS

transaction number and date to trace the transaction to the firearms dealer

and refer the transaction to ATF and (2) ATF could then use the dealer’s

record, which provides information on the purchaser, to retrieve the

firearm.

Our work indicates, however, that DOJ’s proposed option may be only a

partial solution, because the FBI still may not have been able to initiate

firearm-retrieval actions for about one-half of the 228 retrieval actions

 16Department of Justice, Bureau of Justice Statistics, Improving Criminal History Records

for Background Checks, NCJ-192928 (Washington, D.C.: Feb. 2002).
Page 12 GAO-02-653 Next-Day Destruction of NICS Records

discussed above. NICS officials explained that when a state agency or

other external source provides information showing that a transfer should

be denied, the FBI uses this information to determine if the audit log

contains prior records of allowed transfers for the same individual that

also should have been denied. If so, the FBI will reverse the prior

transactions to denials and initiate a retrieval action if firearms were

transferred. NICS officials told us that DOJ’s proposal to temporarily

retain (for 90 days) the firearms dealer’s identification number generally

would not allow the FBI to link the prohibiting information from one

transaction to a prior transaction that also should have been denied.

Rather, the individual’s name or other personal identifying information

needs to be retained in the audit log to make such a link. To reiterate, FBI

data show that—of the 228 firearm-retrieval actions initiated during the

period July 3, 2001, through January 2, 2002—about one-half were related

to prior transactions and were initiated using personal identifying

information retained under the current 90-day retention policy. The FBI

generally would not have been able to initiate these retrieval actions under

DOJ’s proposed option.

In addition to the 228 transactions that resulted in firearm-retrieval

actions, a policy requiring next-day destruction of records would 

have affected other NICS transactions in which firearms could have

been transferred but were not. More specifically, during the 6-month

period, FBI data show that the FBI reversed an additional 179 transactions

from proceeds to denials 1 or more days after the initial decision to allow

the transfers to proceed. Thus, firearms could have been transferred to

prohibited persons in each of these 179 transactions. However, using

records retained under the current 90-day retention policy, the FBI

contacted gun dealers and found that firearms were not transferred. NICS

officials speculated that the primary reason why transfers did not occur

was because the transactions may have been initially delayed and the

prospective purchasers did not return to buy the firearms.

The 228 transactions that resulted in firearm-retrieval actions—as well as

the 179 transactions that did not involve firearms transfers—were all

“regular proceed” transactions in which the FBI gave gun dealers

affirmative responses that the transfers could proceed. As mentioned

previously, each of these transactions would have been affected by the

proposed policy requiring next-day destruction of records. FBI officials

Next-Day Destruction of

Records Would Have

Affected Other

Transactions
Page 13 GAO-02-653 Next-Day Destruction of NICS Records

noted, however, that the vast majority of firearm-retrieval actions initiated

by the FBI would not be affected by such a policy.17 The officials explained

that retrieval actions generally involve “default proceed” transactions.18

Such transactions occur when the FBI cannot complete a NICS

background check within 3 business days, after which gun dealers are

legally allowed to transfer firearms without an affirmative response from

the FBI as to the purchasers’ eligibility. Under the proposed changes to the

NICS regulations, the FBI could retain data for up to 90 days on default

proceed transactions that have not been resolved with affirmative proceed

or denial responses. Thus, these transactions would not be affected by a

policy requiring next-day destruction of records.

In addition to the firearm-retrieval actions discussed above, the FBI has

developed procedures that use retained audit log records to identify

prohibited persons who may be in possession of firearms. For example,

under current procedures, when a NICS examiner receives a transaction to

research, the examiner is to search audit log records to determine if

research had previously been done on the individual through a prior

background check. If the examiner’s search finds that an individual has

multiple firearms transactions with different final statuses (e.g., both

proceeds and denials), the examiner is to review each transaction to

ensure that correct decisions were made. If the examiner determines that

an individual had been legally allowed to purchase a firearm in the past

but is currently prohibited from doing so, the examiner is to enter a

comment in the audit log record to alert ATF that the currently prohibited

person may be in possession of firearms from previous transactions

initiated within the 90-day retention period. ATF officials told us that

when ATF is notified of any past purchases by a prohibited person, this

information is referred to the appropriate ATF field office for

investigation.

The FBI does not maintain data on how often these procedures have

identified prohibited persons in possession of firearms, but FBI officials

 17FBI data show that, from November 30, 1998 (when NICS became operational), through

December 31, 2001, the FBI initiated a total of approximately 13,000 firearm-retrieval

actions.

18In an earlier report, we provided detailed information on NICS default proceed

transactions. See U.S. General Accounting Office, Gun Control: Options for Improving the

National Instant Criminal Background Check System, GAO/GGD-00-56 (Washington,

D.C.: Apr. 12, 2000).

Retained Records Were

Used to Research Previous

Transaction and Identify

Potential Firearm

Retrievals
Page 14 GAO-02-653 Next-Day Destruction of NICS Records

told us that it does occur. The officials noted that next-day destruction of

records would lessen the effectiveness of these procedures in identifying

the need for firearm-retrieval actions.

As mentioned previously, when a NICS examiner receives a transaction to

research, the examiner is to search the audit log to determine if research

had previously been done on the individual through a prior background

check. If research had been done previously, the examiner can use this

information in making a determination as to whether the firearm

transaction should proceed or be denied. Under a next-day destruction of

records policy, NICS examiners would lose the ability to reference

previous audit log transactions for information that may assist in resolving

current transactions.

NICS officials explained that audit log records have a comment field that

includes the case history of all activity related to the respective

transaction. For example, the comment field may include clarifications

and verifications provided orally by outside law enforcement agencies, as

well as information related to charges (arrest records) that cannot be

formally posted to national criminal history databases.19 If the same

individual attempts to purchase another firearm within the current 90-day

retention period, the NICS examiner can access audit log records to

resolve the second transaction.

Without records of allowed transfers, NICS examiners may have to make

repeat calls to law enforcement agencies, including state and local courts,

for the same information. This rework could lengthen the amount of time

needed to complete NICS background checks and may result in cases in

which the FBI is unable to complete such checks within 3 business days,

after which the firearm transfer is allowed to proceed by default. Also,

according to NICS officials, states may resist performing this rework if

they know they provided the same records in the past, such as police

reports and mental health information. The officials noted, however, the

same problem applies under the current 90-day retention policy if, after 90

days, the same information is needed. FBI officials told us that the audit

log assists NICS examiners in resolving current transactions many times

 19For example, arrest records not supported by fingerprints are ineligible for posting to

certain national criminal history databases.

Next-Day Destruction

of Records Could

Lengthen Time

Needed to Complete

Background Checks
Page 15 GAO-02-653 Next-Day Destruction of NICS Records

each day, although the FBI does not maintain data on the extent to which

this occurs.

The impact of losing information from previous NICS transactions may be

partially mitigated by an FBI proposal to create a “voluntary appeals file,”

which would allow lawful purchasers to request that NICS retain

information to facilitate future NICS transactions. Under this proposal,

individuals who have experienced erroneous delays or denials by the

system will have the option of supplying the FBI with information—such

as name, date of birth, Social Security number, other identifying numbers,

and any documents—that may clarify their record. Such documents may

include a governor’s pardon, restoration of rights document, or conviction

dismissal. Individuals would have to agree to have information posted to

the voluntary appeals file.

FBI officials did not know the extent to which individuals would actually

volunteer information for the appeals file or whether individuals would be

reluctant to do so based, for example, on concerns that such a file could

be a registry of gun owners. However, based on its analysis of appealed

transactions, the FBI plans to add 17 new staff members to maintain the

voluntary appeals file.

Next-day destruction of records would lessen the FBI’s ability to respond

to gun dealer, purchaser, and congressional inquiries related to the

outcomes of background checks. According to NICS officials, licensed gun

dealers sometimes call NICS to obtain or confirm proceed or denial

decisions after the initial notifications. For example, a gun dealer’s

employee may have forgotten to record the NICS response on the firearms

transaction form (ATF form 4473) or may have noted the response on a

piece of paper that was inadvertently thrown away. NICS officials told us

that such calls primarily come from major retail corporations that do a

large volume of firearms sales, have a high turnover of personnel, hire

seasonal employees, or have people filling in for gun department

employees for short periods of time. The FBI does not maintain data on

the number of such inquiries received from gun dealers, but NICS officials

estimated that about three to five calls are received each week. Generally,

the FBI also would not be able to respond to purchaser and congressional

inquiries related to proceeded transactions. NICS officials explained that

such inquiries usually are related to the NICS appeals process. For

example, a purchaser may contact NICS to determine why a proceeded

transaction was initially delayed. If the proposal for next-day destruction

Next-Day Destruction

of Records Would

Lessen the FBI’s

Ability to Respond to

Inquiries
Page 16 GAO-02-653 Next-Day Destruction of NICS Records

of records is implemented, the FBI plans to respond to such inquiries with

generic letters, simply stating that no information is available.

According to ATF headquarters officials, although ATF will need to adjust

procedures related to checking for abuses of NICS if a next-day

destruction policy is adopted, such a policy would not affect ATF’s ability

to inspect gun dealer records. However, our work indicates that the effect

of such a policy on ATF inspections is unclear.

Under current procedures, ATF inspectors are to use a worksheet to

record the total number of NICS background checks a firearms dealer’s

records show were conducted in the 3 months prior to the date of the

inspection, as well as the total number of responses (proceed, denied, and

delayed) provided by NICS during this time.20 Also, on the worksheet, ATF

inspectors are to record—for a sample of transactions—the date the

firearms dealer contacted NICS; the NICS transaction number; the

transferee’s name, sex, race, date of birth, and state of residence; the type

of transaction (e.g., transfer of a handgun or long gun); and the final

response provided by NICS. The completed worksheet then is to be

forwarded to FBI staff, who are to compare the worksheet data to the

NICS audit log. Discrepancies are to be noted and returned to ATF.

According to ATF and FBI officials, discrepancies in personal identifying

information could indicate misuse of the system. For example,

discrepancies could indicate that a firearms dealer submitted inaccurate

or false information to NICS for the purpose of avoiding a background

check on the person to whom the gun was transferred. Also, discrepancies

could indicate that a firearms dealer used NICS for unauthorized purposes,

such as running checks on individuals not intending to purchase firearms.

Current NICS regulations note that it is essential to retain information on

approved firearms transfers temporarily to allow for the possibility of

discovering such abuses. The regulations further state that, at a minimum,

allowing for the possibility of audits should have a deterrent effect on

certain firearms dealers who might otherwise consider abusing the system.

The ATF worksheet review procedure will no longer be used if the

proposal for next-day destruction of records is implemented.

 20Licensed dealers are required to retain records of firearms transactions for at least 20

years after the date of sale or transfer.

Effect of a Next-Day

Destruction Policy on

ATF Inspections of

Gun Dealer Records is

Unclear
Page 17 GAO-02-653 Next-Day Destruction of NICS Records

According to ATF headquarters officials, no ATF field office has found any

NICS violations specifically involving the falsification of purchaser names

through the worksheet review procedure. Officials at the five ATF field

offices we contacted (Birmingham, Buffalo, San Antonio, Detroit, and

Fresno) also told us they had not detected any misuse of NICS or

identified other significant discrepancies through the worksheet reviews.21

The officials noted that the vast majority of discrepancies identified during

reviews occur because of clerical errors made by firearms dealers or ATF

inspectors, such as dealer errors in recording purchaser information onto

firearms transaction records or inspector errors in copying this

information onto worksheets.22 The officials provided mixed views on the

value of the worksheet reviews. Three of the five officials told us that the

reviews are useful for monitoring firearms dealers’ use of NICS and for

deterring some firearms dealers from misusing the system. According to

these three officials, without NICS records of allowed firearms transfers,

(1) it would be more difficult to identify potential misuse of the system

and (2) much, if not all, of the deterrent value of the worksheet reviews

would be lost. Officials from the other two field offices told us that the

current worksheet reviews do not yield useful information. The two

officials also noted that the reviews have little deterrent value because

firearms dealers are not aware that their records are being compared with

NICS data. However, ATF headquarters officials told us they believe

firearms dealers are aware of ATF’s procedures for conducting inspections

of their records.

According to ATF headquarters officials, under the proposed next-day

destruction policy, the worksheet review procedure would be replaced by

a NICS “recheck” procedure, under which ATF inspectors would request

that the FBI rerun selected NICS checks based on information taken from

gun dealer records. The officials noted that such rechecks would allow

ATF to detect potential misuse of NICS and would serve as a deterrent. At

the time of our review, ATF was still in the process of developing plans for

requesting rechecks. Nonetheless, rerunning background checks would

not allow a detailed comparison of information in NICS records with gun

dealer records and, thus, may not be conducive to identifying or deterring

 21Our methodology for selecting ATF field offices to contact is presented in appendix II.

22According to ATF headquarters officials, another possible reason for discrepancies

identified during worksheet reviews is that FBI examiners could incorrectly enter

information from ATF worksheets into their computer systems.
Page 18 GAO-02-653 Next-Day Destruction of NICS Records

some types of potential system misuse, such as using NICS for

unauthorized purposes.

Also, the proposed revisions to the NICS regulations would allow the FBI

to extract information from NICS to create, upon prior written request

from ATF, individual firearms dealers audit logs that contain not more

than 30 days worth of transactions. The individual audit logs would

contain the NICS transaction number and the date of inquiry for allowed

transactions, and all information on denied or unresolved transactions.

ATF could then determine if a firearms dealer had requested more or

fewer background checks than its records indicated, which may reveal

possible misuse of the system. ATF also could determine if a dealer sold a

firearm to someone the NICS record showed should have been denied.

On June 4, 2002, we provided a draft of this report for comment to DOJ

and the Department of the Treasury. In its written comments, DOJ

emphasized that the statutory authority for retaining records of approved

firearms transactions extends only to the limited purpose of auditing the

system to ensure its privacy, accuracy, and proper performance. DOJ

explained that although information obtained from the audit log of

approved transfers pursuant to a system audit may be used incidentally for

investigative or other functions, such secondary use cannot replace

auditing as the sole permissible purpose for accessing information in the

audit log of approved transfers. These comments are consistent with the

information that we are reporting.

DOJ also said that our primary concern regarding a possible inability to

retrieve a relatively small number of erroneously transferred firearms was

unfounded for two reasons. First, DOJ reiterated that it was considering

an option to retain the firearms dealer’s identification number for 90 days.

Second, DOJ noted that after the FBI has made a referral for ATF to

retrieve a firearm erroneously transferred to a prohibited person, ATF has

ample investigative avenues (beyond the audit log) to determine whether

the prohibited person has other firearms that are illegally possessed.

Thus, according to DOJ, contrary to the conclusion of our report, all

erroneously transferred firearms could be retrieved.

We disagree. Our analysis indicates that DOJ’s option and ATF’s

investigative avenues are only partial solutions. As indicated previously,

FBI data show that—of the 228 firearm-retrieval actions initiated during

the period July 3, 2001, through January 2, 2002—about one-half were

initiated using the purchasers’ personal identifying information retained

Agency Comments
Page 19 GAO-02-653 Next-Day Destruction of NICS Records

under the current 90-day retention policy. The FBI generally would not

have been able to initiate these retrieval actions under DOJ’s proposed

option of retaining the dealer’s identification number but not retaining

personal identifying information about the respective purchaser.

Further, we recognize that ATF has various investigative avenues to

determine if a prohibited person is in possession of firearms. For instance,

in the course of an investigation, ATF can question the individual and

examine gun dealer records. However, in many cases, absent an FBI

referral, ATF would have no reason or basis for opening an investigation.

Further, expecting ATF agents to probe for illegally possessed firearms

would not be as effective as the FBI using retainable records to notify ATF

that firearms definitely have been transferred to prohibited persons.

The full text of DOJ’s comments is reprinted in appendix III.

The Department of the Treasury and the FBI provided technical comments

and clarifications, which have been incorporated in this report where

appropriate.

As arranged with your office, unless you publicly announce this report’s

contents earlier, we plan no further distribution until 30 days after the date

of this report. We will then send copies to the relevant congressional

committees, the Attorney General, the FBI Director, and the ATF Director.

We will also make copies available to other interested parties upon

request. In addition, the report will be available at no charge on the GAO

Web site at http://www.gao.gov.
Page 20 GAO-02-653 Next-Day Destruction of NICS Records

Please contact me at (202) 512-8777, or Danny Burton at (214) 777-5600, if

you or your staff have any questions. Other key contributors to this report

were Philip Caramia, Eric Erdman, Geoffrey Hamilton, Jan Montgomery,

and Linda Kay Willard.

Sincerely yours,

Laurie E. Ekstrand

Director, Justice Issues
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 21 GAO-02-653 Next-Day Destruction of NICS Records

This appendix provides an overview of the history of retention periods

related to National Instant Criminal Background Check System (NICS)

records. The appendix also summarizes the current Department of Justice

(DOJ) notice of proposed rulemaking, which, among other things, would

require next-day destruction of NICS records related to allowed firearms

transfers.

The Brady Handgun Violence Prevention Act (Brady Act) required the

Attorney General to establish a national instant criminal background

check system to be contacted by licensed firearms dealers for information

as to whether the transfer of a firearm would violate federal or state law.1

In June 1998, DOJ published the initial notice of proposed rulemaking that

outlined policies and procedures for implementing NICS.2

 The proposed

rule provided that the Federal Bureau of Investigation (FBI) would

maintain information on allowed firearms transfers in NICS for 18 months,

after which time the information would be destroyed. Based on comments

objecting to the proposed 18-month retention period, DOJ reexamined the

time period needed to perform audits of NICS.

As a result, the final NICS regulations3

 (effective Nov. 30, 1998) provided

that information on allowed firearms transfers may be retained for no

more than 6 months.4

 According to the final rule, in light of the statutory

requirement that records of allowed transfers be destroyed, and the

countervailing statutory requirement to provide for system privacy and

security, the general retention period for records of allowed transfers in

the NICS audit log should be the minimum reasonable period for

performing audits on the system, but in no event more than 6 months. The

final rule also provided that such records may be retained for a longer

period if necessary to pursue identified cases of misuse of the system.

Further, the rule noted that the FBI shall work toward reducing the

retention period to the shortest practicable period of time less than 6

months that would allow for basic security audits of NICS.

 1

The Brady Handgun Violence Prevention Act, Public Law 103-159, 107 Stat. 1536 (1993),

amended the Gun Control Act of 1968, Public Law 90-618, 82 Stat. 1213 (1968).

2

63 Fed. Reg. 30,430 (1998) (proposed June 4, 1998).

3

63 Fed. Reg. 58,303 (1998).

4

NICS regulations are found at 28 C.F.R. Part 25.

Appendix I: Retention of National Instant

Criminal Background Check Records

History of NICS

Records Retention

Periods
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 22 GAO-02-653 Next-Day Destruction of NICS Records

On March 3, 1999, DOJ issued proposed changes to the NICS regulations

that would reduce the maximum retention period from 6 months to 90

days.5 In making this proposal, DOJ noted that there was (1) no formula to

determine with precision what retention period would be the minimum

necessary to allow adequate audits of NICS and (2) no historical data

regarding the use of NICS that could be analyzed because NICS was a new

system. According to the proposal, DOJ recognized the need for a

sufficient period of system activity to be audited, as well as time to

administer the audits. DOJ concluded that 90 days was the shortest

practicable period of time for retaining records of allowed transfers that

would permit the performance of basic security audits of NICS. DOJ

cautioned, however, that the shorter the retention period, the less likely it

would be that random audits would uncover or deter system misuse. This

proposal also (1) clarified that only the FBI has direct access to the NICS

audit log and (2) authorized the FBI to extract and provide information

from the audit log to the Bureau of Alcohol, Tobacco and Firearms (ATF)

for use in inspections of firearms dealers’ records, under certain

conditions.6

In January 2001, DOJ published the final rule amending the NICS

regulations that reduced the maximum retention period for records of

allowed firearms transfer from 6 months to 90 days.7

 According to the final

rule, many of the comments on the proposed rule asserted that the Brady

Act required immediate destruction of records related to lawful

transactions and that retention of this information constituted an illegal

firearms registry. DOJ noted that (1) the Brady Act required the Attorney

General to establish an adequate system of oversight and review of NICS

and (2) the FBI consequently proposed the retention of records of

approved transactions in an audit log for a limited period of time to satisfy

the Brady Act’s requirement of ensuring the privacy and security of NICS

and the proper operation of the system. DOJ also noted that although the

Brady Act mandates the destruction of all personally identified

information in NICS associated with approved firearms transactions (other

than the NICS transaction number and the date the number was assigned),

 5

64 Fed. Reg. 10,262 (1999) (proposed March 3, 1999).

6

The FBI’s authority to provide ATF with audit log information went into effect on July 3,

2001. However, in its July 6, 2001, notice of proposed rulemaking, DOJ noted that, during

the public comment period, the FBI will not exercise its discretionary authority to provide

this information to ATF, except as specifically authorized by the Attorney General.

7

66 Fed. Reg. 6,470 (2001).
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 23 GAO-02-653 Next-Day Destruction of NICS Records

the statute does not specify a period of time within which records of

approvals must be destroyed. Further, DOJ noted that the temporarily

retained information on approved firearms transfers is used only for

purposes related to discovering misuse or avoidance of the system and the

proper operation of the system. The final rule also provides that NICS will

not be used to establish any system for the registration of firearms, firearm

owners, or firearm transactions or dispositions, except with respect to

persons prohibited from receiving a firearm under federal or state law.

The final rule reducing the maximum retention period to 90 days was

originally scheduled to take effect on March 5, 2001. However, DOJ

postponed the effective date twice, and set a revised date of July 3, 2001.

According to DOJ, these postponements were prompted by the

department’s need to conduct a review of the rule and record in light of

the department’s original commitment that it would “work toward

reducing the retention period to the shortest practicable period of time

less than six months that will allow basic security audits of the NICS.”

Based on this review, DOJ took two related steps. First, DOJ determined

that the final rule implementing the 90-day retention period would take

effect on July 3, 2001. Second, on July 6, 2001, DOJ published a new notice

of proposed rulemaking to propose further changes in the NICS

regulations, including a proposal for prompt destruction of records of

allowed transactions. These proposed changes are discussed later in this

appendix.

The temporary retention of NICS records has withstood a legal challenge.

Specifically, in November 1998, the National Rifle Association of America,

Inc., filed a suit against the U.S. Attorney General challenging the

temporary retention of audit log data. The association argued that the

Brady Act required immediate destruction of personal information related

to firearms transactions. DOJ asserted that temporary retention of audit

log data for at most 6 months was necessary to audit NICS to ensure its

accuracy and privacy. In January 1999, a U.S. district court dismissed the

complaint, finding that nothing in the Brady Act required immediate

destruction and that the Attorney General’s construction of the Brady Act

was reasonable. In July 2000, a U.S. court of appeals affirmed the district

court’s dismissal, finding that the Brady Act did not prohibit temporary

retention of information about lawful firearms transactions and that the

Attorney General had reasonably interpreted the Brady Act to permit the
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 24 GAO-02-653 Next-Day Destruction of NICS Records

retention of such information for audit purposes.8 In May 2001, the

Supreme Court declined to hear the National Rifle Association’s appeal

from the U.S. Court of Appeals for the District of Columbia.

On July 6, 2001, DOJ published a notice of proposed rulemaking9

 that

contained five proposals to make additional changes in the current NICS

regulations. According to DOJ, the proposed changes balance the

legitimate privacy interests of law-abiding firearms purchasers and the

department’s obligation to enforce the Brady Act to prevent prohibited

persons from purchasing firearms. The five proposals are summarized

below, generally using language contained in the notice of proposed

rulemaking. At the time of our review, DOJ had not published a final rule

related to this notice.

According to the notice of proposed rulemaking, the first proposal would

amend current NICS regulations to provide for a general rule requiring

prompt destruction of information in the NICS audit log pertaining to

allowed transfers, coupled with specific statutory authority to retain

information in certain situations in order to ensure the security and

integrity of the system. This proposal also would revise and reorganize

existing provisions in current NICS regulations for greater clarity.

This proposal would require the destruction of all information in the audit

log relating to the lawful purchaser or the transfer (other than the NICS

transaction number and the date of inquiry) on all allowed transactions

prior to the start of the next business day following the date on which the

“proceed” message was received by the initiator of the NICS check.10

However, when requested in writing by ATF for inspection purposes, this

proposal would authorize the FBI to retain certain identifier information,

such as the firearms dealer identifier issued by ATF (see proposal number

2 below). Proposal number 1 makes no change in the existing provisions

of the NICS rules pertaining to the retention of records of transactions

where the transfer was denied because the putative purchaser is

 8

National Rifle Association of America, Inc. v. Reno, 216 F.3d 122, (D.C. Cir. 2000), cert.

denied 533 U.S. 928 (2001).

9

66 Fed. Reg. 35,567 (2001) (proposed July 6, 2001).

10According to an FBI official, the term “business day” should be interpreted as the NICS

operational day, which starts at 8:00 a.m. and runs until 1:00 a.m.

DOJ’s Current Notice

of Proposed

Rulemaking

Proposal Number 1:

Prompt Destruction of

Records of Allowed

Transactions
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 25 GAO-02-653 Next-Day Destruction of NICS Records

prohibited by state or federal law from purchasing a firearm. There also is

no change in the existing provision authorizing the FBI to retain and use

information pertaining to allowed transfers as long as needed to pursue

cases of identified misuse of the system.

By keeping all records until the start of the next business day, the NICS

Operations Center would be able to compile statistics on the operation of

the system, such as the number of calls per state per day, the percentage

of checks run on long guns versus handguns, and other statistical

information that does not include personally identifiable information on

lawful purchasers. By destroying personally identifiable information on

allowed transfers before the start of the next business day, the NICS

Operations Center would have the hours between the close of one

business day and the start of the next business day to run internal audits,

amass statistical data, accomplish destruction of the necessary records,

and carry out other system maintenance with minimal disturbance to the

system.

Under federal law, firearms dealers are required, prior to transferring a

firearm to an unlicensed individual, to examine a valid identification

document of the potential purchaser, contact NICS, receive and record

from NICS a unique NICS transaction number, and either receive an

indication that the transaction may proceed or wait until 3 business days

have passed without receiving a determination from NICS that the transfer

is denied.11 In addition, federal law outlines firearms dealers’ record

keeping requirements and the authority for ATF to review dealer records.12

Specifically, federal law provides for ATF inspection or examination, not

more than once in any 12-month period, of the inventory and records of a

licensed dealer to ensure compliance with federal record keeping

requirements.

This proposal would allow the FBI to extract information from NICS to

create, upon prior written request from ATF in connection with its

inspections of firearms dealers’ records, individual firearms dealer audit

logs that contain not more than 30 days worth of allowed transactions

from an identified dealer. Such individual audit logs would contain, with

respect to allowed transfers, the NICS transaction number and the date of

 1118 U.S.C. 922(t).

1218 U.S.C. 923(g)(1).

Proposal Number 2:

Individual Firearms

Dealers Audit Logs
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 26 GAO-02-653 Next-Day Destruction of NICS Records

inquiry. All information on denied transactions or unresolved transactions

will also be included in the individual audit log. The proposal seeks to

meet the law enforcement needs of ATF and the FBI by providing to ATF,

prior to an inspection of an identified firearms dealer, information

necessary to ensure that the dealer is complying with federal requirements

to conduct a NICS check prior to transferring a firearm to an unlicensed

person. Under this proposal, ATF would be required to destroy all

information on allowed transfers within a set period of time (90 days) after

the date of creation of the individual firearms dealer audit log. NICS would

also be required to delete other identifier information, such as the firearms

dealer identifier, from the system within 90 days of the date of the

transaction.

According to the notice of proposed rulemaking, this proposal would

provide a new definition in NICS regulations pertaining to “unresolved”

transactions, for two reasons. First, in those states in which NICS

performs background checks for firearms dealers,13 if the NICS examiner

cannot determine within 3 business days whether the proposed firearm

transfer would violate state or federal law, the transaction is designated

informally as a “default proceed.” Under federal law, the firearms dealer is

not prohibited from transferring the firearm if NICS has not responded

with a denial notification within 3 business days.14 Despite the fact that 3

business days have elapsed, it is the practice of NICS examiners to

continue research on such transactions for 21 days to determine whether

the transaction is an actual “proceed” (allowed) or “denied.” Under

proposal number 1 above, the system may be required to purge

information concerning “default proceeds” after 3 business days. DOJ does

not intend this result. NICS should retain information on transactions that

have not been definitively resolved after 3 business days.

This proposal would create a new internal classification system for

transactions that are “unresolved,” meaning the NICS examiner could not

 13Depending on the willingness of their state government to act as a NICS liaison, firearms

dealers contact either the FBI or a designated state agency to initiate background checks

on individuals purchasing firearms. At the time of our review, the FBI conducted all

background checks in 25 states, the District of Columbia, and 4 U.S. territories, while a

state agency conducted all checks in 15 states. In the remaining 10 states, both the FBI and

a state agency conducted background checks, depending on the type of firearm being

purchased (e.g., handgun or long gun).

1418 U.S.C. 922(t)(1)(B)(ii).

Proposal Number 3: New

Definition of “Unresolved”

Transaction
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 27 GAO-02-653 Next-Day Destruction of NICS Records

verify that a “hit” in the database is or is not a disqualifier under state or

federal law. This classification will allow NICS to maintain such

unresolved transactions until either (1) a final determination on the

transaction is reached, resulting in the transaction being changed to a

“proceed” (prompt destruction) or a “denied” (permanent retention)

status, or (2) the expiration of the retention period for unresolved

transactions. DOJ proposes a retention period of no more than 90 days,

consistent with the retention period under the final rule that took effect on

July 3, 2001. In cases of unresolved transactions, the NICS examiner would

continue to respond to a firearms dealer in the same manner as is current

practice for “default proceeds.” This change does not affect the manner or

form in which response information is relayed by the NICS examiner to

the firearms dealer.

Second, in “point-of-contact” states, a state agency is responsible for

performing background checks for potential gun purchasers, including

contacting NICS as part of that background check. When a state agency

contacts NICS as part of a background check it initiates, NICS presently

records that transaction as an “implied proceed” unless and until the state

transmits to the system the ultimate determination for that transaction

(either “proceed” or “denied”). Once again, under a prompt destruction

alternative, these transactions records could be removed from NICS

before a final determination is made. In order to have the most accurate

record of denials in the system, this proposal would classify all stateinitiated transactions as “unresolved” until the state transmits the final

determination to NICS. In cases of “proceed” or allowed transfers, NICS

would be required to destroy such records within the time frame discussed

in proposal number 1 above. Again, records of unresolved transactions

would be deleted from the system within 90 days. The new category of

“unresolved” would not affect a firearms dealer’s ability to transfer or not

transfer a firearm after 3 business days but would allow NICS to keep

accurate records of the precise status of NICS transactions.

According to the notice of proposed rulemaking, under current NICS

regulations, point-of-contact states are encouraged, but not required, to

provide NICS with the results of background checks indicating that a

firearm transfer is denied. Most point-of-contact states do not transmit this

information to NICS. This means that a potential purchaser could be

prohibited under state or federal law (based upon information available to

a state from records available to that state only), yet NICS would not have

access to that determination. If the prohibited purchaser then traveled to

Proposal Number 4:

Require Point-of-Contact

States to Transmit State

Determinations to NICS
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 28 GAO-02-653 Next-Day Destruction of NICS Records

another state and again attempted to purchase a firearm, NICS would be

unable to stop the prohibited purchase.15

This proposal would condition participation as a point-of-contact state on

transmission of state determination information to NICS as soon as it is

available, so that NICS will have accurate records of all prohibited

persons. Because state laws vary on how quickly the background check

must be completed, the proposed rule does not specify a particular length

of time for transmittal, but instead requires the transmittal “upon

communication of the determination to the firearms dealer or the

expiration of any applicable state waiting period.” Until NICS receives the

determination information, it will identify the transaction as unresolved.

Determination information from point-of-contact states would still be

subject to the rules governing record retention. NICS may not retain

information on allowed transfers that originate in a point-of-contact state

for a longer period of time than it may keep information about a NICSoriginated allowed transaction.

According to the notice of proposed rulemaking, this proposal addresses

those situations in which a lawful firearms purchaser might desire to have

personal information retained in NICS to avoid confusion or delays in

future purchases. Because NICS must destroy all identifying information

on allowed transactions after not more than 90 days (or before the start of

the next business day under proposal number 1 above), if a potential

purchaser is delayed or denied a firearm and then successfully appeals the

decision, NICS would not be able to retain a record of the appeal and

supporting documents. This means that if a lawful purchaser has a similar

name and date of birth as a convicted felon, he or she may be delayed, or

denied a purchase, until NICS can determine that the lawful purchaser is

not the felon. Often, this is done through submission of fingerprints.

However, under the existing retention rules, once that purchase is

determined to be allowed, NICS cannot retain the information identifying

the person as a lawful purchaser for more than 90 days and must destroy

all identifying information relating to the person and the transfer—even if

retention is requested by the lawful purchaser. Both the NICS Operations

Center and individual purchasers have requested creation of a mechanism

 15According to ATF officials, it is unlawful for a firearms dealer to sell a handgun to an outof-state resident. The officials noted that a firearms dealer may sell a long gun to an out-ofstate resident provided the sale does not violate the state law in the purchaser’s state or the

dealer’s state.

Proposal Number 5:

Voluntary Appeals File
Appendix I: Retention of National Instant

Criminal Background Check Records

Page 29 GAO-02-653 Next-Day Destruction of NICS Records

by which NICS can keep, upon request of the purchaser, such clarifying

information in a separate computer file within NICS.

This proposal would allow the creation of a Voluntary Appeals File for the

purpose of allowing lawful purchasers to request that NICS retain such

information to facilitate future NICS transactions. Under this proposal,

potential firearms transferees experiencing erroneous delays or denials by

the system will have the option to supply the FBI with information—such

as name, date of birth, Social Security number, any other identifying

numbers, and any documents—that may clarify their records or prove

their identity. NICS would be required to destroy any records submitted to

the Voluntary Appeals File upon written request from the individual. Such

information could be retained and used by the FBI as long as needed to

pursue cases of identified misuse of the system.
Appendix II: Objectives, Scope, and

Methodology

Page 30 GAO-02-653 Next-Day Destruction of NICS Records

Senator Richard J. Durbin, Chairman, Subcommittee on Oversight of

Government Management, Restructuring, and the District of Columbia,

Senate Committee on Governmental Affairs, requested that we provide

information about how the Federal Bureau of Investigation’s (FBI)

National Instant Criminal Background Check System (NICS) would be

affected if records related to sales of firearms by licensed dealers were

destroyed within 24 hours after the transfers were allowed to proceed.

Under the Brady Handgun Violence Prevention Act, licensed dealers

generally are not to transfer firearms to an individual until a NICS search

determines that the transfer will not violate applicable federal or state law.

For instance, persons prohibited by federal law from receiving a firearm

include convicted felons, fugitives, unlawful drug users, and aliens illegally

or unlawfully in the United States. However, if the background check is

not completed within 3 business days, the sale is allowed to proceed by

default.

Under current NICS regulations, records of allowed firearms sales can be

retained for up to 90 days in a computer database (i.e., the NICS audit log),

after which the records must be destroyed. The audit log contains

information related to each background check requested by a licensed

firearms dealer, including the NICS response (e.g., proceed or denied) and

the history of all activity related to the transaction. According to the NICS

regulations, information on allowed firearms sales is used only for

purposes related to ensuring the proper operation of the system or

conducting audits of the use of the system. On July 6, 2001, the

Department of Justice (DOJ) published proposed changes to the NICS

regulations that would reduce the maximum retention period from 90 days

to less than 1 day for records of allowed firearms sales.1

As agreed with the requester, we studied the effects that next-day

destruction of records would have on NICS operations and system audits.

Our work provides an overview of the extent to which the FBI’s planned

changes to NICS operations and routine system audits address the effects

of the proposed next-day destruction policy. Also, in more detail, our work

provides information on the effects such a policy would have on (1)

 1

Generally, the proposed changes to the NICS regulations would require next-day

destruction of records. More specifically, the proposed changes would require that records

related to allowed firearms transfers be destroyed before the start of the next business day

following the date on which a “proceed” message allowing the transfer was received by the

licensed dealer that requested the NICS search. The NICS business day starts at 8:00 a.m.

and runs until 1:00 a.m.

Appendix II: Objectives, Scope, and

Methodology

Objectives
Appendix II: Objectives, Scope, and

Methodology

Page 31 GAO-02-653 Next-Day Destruction of NICS Records

nonroutine system audits and related support to law enforcement

agencies; (2) specific aspects of NICS operations, including the FBI’s

ability to initiate firearm-retrieval actions, the time needed to complete

background checks, and the FBI’s ability to respond to inquiries about

completed checks; and (3) the ability of the Bureau of Alcohol, Tobacco

and Firearms (ATF) to inspect gun dealer records.

Generally, in performing our work, we met and had various telephone

discussions with officials from the FBI’s NICS Program Office and the

Criminal Justice Information Services Division in Clarksburg, West

Virginia. During our visit to the program office, we interviewed applicable

managers and reviewed relevant documents related to NICS operations,

system audits, and current uses of the audit log. Also, we reviewed

applicable federal regulations (e.g., NICS regulations and related Privacy

Act Notices), DOJ and FBI policies and procedures, and DOJ’s current

proposed changes to the NICS regulations.2 Further, we interviewed

officials from ATF headquarters and five field offices, and we reviewed

documentation they provided us. We relied on testimonial and

documentary evidence—such as agency statistics—provided by FBI and

ATF officials. We did not fully assess the reliability or accuracy of the data

provided to us. However, we did discuss the sources of data with agency

officials, and we worked with them to resolve any inconsistencies. Our

work focused on how the proposal for next-day destruction of records

would affect NICS background checks conducted by the FBI—and not

those conducted by a state agency.3

 States that conduct NICS checks

generally have their own retention laws that may not be affected by a

federal next-day destruction policy. However, such a policy would affect

states that do not have their own retention laws.

To obtain information on the extent to which the FBI’s planned changes to

NICS operations and routine system audits address the effects of the

proposed next-day destruction policy, we interviewed FBI officials and

 2

DOJ’s current notice of proposed rulemaking related to NICS is summarized in appendix I.

3

Depending on the willingness of their state government to act as a NICS liaison, firearms

dealers contact either the FBI or a designated state agency to initiate background checks

on individuals purchasing firearms. At the time of our review, the FBI conducted all

background checks in 25 states, the District of Columbia, and 4 U.S. territories, while a

state agency conducted all checks in 15 states. In the remaining 10 states, both the FBI and

a state agency conducted background checks, depending on the type of firearm being

purchased (e.g., handgun or long gun).

Scope and

Methodology of our

Work
Appendix II: Objectives, Scope, and

Methodology

Page 32 GAO-02-653 Next-Day Destruction of NICS Records

reviewed relevant documents related to current NICS operations,

including NICS operating procedures, operations reports, and audit

reports. We also reviewed the FBI’s revised draft NICS concept of

operations document, which addresses operational changes needed to

support a next-day destruction policy. Further, we interviewed officials

from the NICS Program Office’s Internal Assessment Group and reviewed

relevant documents to determine (1) how the audit log is currently used to

support routine system audits, (2) the results of current system audits, (3)

how these audits would be affected by a next-day destruction policy, and

(4) the FBI’s proposed plan for conducting routine audits under such a

policy.

To obtain information on the effects the proposed next-day destruction

policy would have on nonroutine system audits and related support to law

enforcement agencies, we interviewed FBI officials and reviewed an

October 1, 2001, DOJ legal opinion on checking the names of prohibited

persons against NICS audit log records of allowed firearms transfers.

Regarding NICS operations, we studied the effects the proposed next-day

destruction policy would have on the FBI’s ability to initiate firearmretrieval actions, and the related public safety implications. Specifically,

we focused on (1) identifying the number of NICS transactions that the

FBI initially allowed to proceed but later determined should have been

denied, (2) determining how many of these transactions resulted in the

FBI initiating firearm retrieval actions, and (3) determining how many of

the retrieval actions could not have been initiated under the proposed

next-day destruction policy. Related to these transactions, we obtained

data on how the FBI became aware of information that resulted in

proceeded transactions being changed to denials, as well as data on

prohibiting offenses related to the retrieval actions. We focused on

retrieval actions that the FBI initiated during the first 6 months of the

current 90-day retention policy—July 3, 2001, through January 2, 2002. We

also reviewed FBI procedures that are designed to identify prohibited

persons who may be in possession of firearms.

To obtain information on the effects a next-day destruction policy would

have on other aspects of NICS operations, we focused on current

operations that would be adversely affected (i.e., the time needed to

complete background checks and the FBI’s ability to respond to inquiries),

while obtaining more general information on capabilities that would

require operational changes but would not be adversely affected. In

addition to interviews with FBI officials, the primary source of this

information was the FBI’s draft NICS concept of operations document. In
Appendix II: Objectives, Scope, and

Methodology

Page 33 GAO-02-653 Next-Day Destruction of NICS Records

some cases, we had to rely on FBI officials to provide estimates and

anecdotal information related to the effects of a next-day destruction

policy on NICS operations, because data on the frequency and the specific

outcomes of current operations that would be adversely affected generally

were not comprehensive or readily available.

To obtain information on the effects of a next-day destruction policy on

the ability of ATF to inspect firearms dealers, we interviewed officials

from the NICS Program Office and ATF headquarters, reviewed current

inspection procedures, and obtained information on proposed changes to

the procedures. We also interviewed officials from 5 ATF field offices to

(1) determine if they had detected any misuse of NICS during their

inspections, (2) obtain their views on the usefulness of current

inspections, and (3) obtain their views on the effects of a next-day

destruction policy on ATF inspections. The 5 ATF field offices were

selected using a two-stage process. First, we identified the 5 ATF field

divisions—out of a total of 23 divisions—that conducted the highest

number of inspections of federal firearms dealers during fiscal year 2001

(Nashville, Boston, Houston, Detroit, and San Francisco). Within each of

these divisions, we selected the field office that conducted the highest

number of inspections during fiscal year 2001 (Birmingham, Buffalo, San

Antonio, Detroit, and Fresno).

It is important to note that the proposed revisions to the current NICS

regulations, as well as the FBI’s current plans for operating under a nextday destruction policy, could change before the final regulations are

published. Such changes could affect the information contained in this

report.
Appendix III: Comments from the Department

of Justice

Page 34 GAO-02-653 Next-Day Destruction of NICS Records

Appendix III: Comments from the

Department of Justice
Appendix III: Comments from the Department

of Justice

Page 35 GAO-02-653 Next-Day Destruction of NICS Records
Appendix III: Comments from the Department

of Justice

Page 36 GAO-02-653 Next-Day Destruction of NICS Records (440081)
The General Accounting Office, the investigative arm of Congress, exists to

support Congress in meeting its constitutional responsibilities and to help

improve the performance and accountability of the federal government for the

American people. GAO examines the use of public funds; evaluates federal

programs and policies; and provides analyses, recommendations, and other

assistance to help Congress make informed oversight, policy, and funding

decisions. GAO’s commitment to good government is reflected in its core values

of accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no cost is

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older

products. The Web site features a search engine to help you locate documents

using key words and phrases. You can print these documents in their entirety,

including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site

daily. The list contains links to the full-text document files. To have GAO e-mail

this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily

E-mail alert for newly released products” under the GAO Reports heading.

The first copy of each printed report is free. Additional copies are $2 each. A

check or money order should be made out to the Superintendent of Documents.

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a

single address are discounted 25 percent. Orders should be sent to:

U.S. General Accounting Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000

TDD: (202) 512-2537

Fax: (202) 512-6061

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800

U.S. General Accounting Office, 441 G Street NW, Room 7149

Washington, D.C. 20548

GAO’s Mission

Obtaining Copies of

GAO Reports and

Testimony

Order by Mail or Phone

To Report Fraud,

Waste, and Abuse in

Federal Programs

Public Affairs