Paperwork is a big responsibility for FFLs. Typically when we’re talking about “paperwork,” we’re focusing on content, common errors, and improving accuracy.
Today, however, we’re going to talk about the physical pieces of paper and how you handle them. You can read this also with your electronic files in mind, particularly because even if you e-file your Form 4473, you are required to maintain paper copies of those files. What we also need to talk about is what to do if you can’t locate one of these precious pieces of paper that could be requested during an ATF audit or during an ATF gun trace.
The preliminary question to ask yourself is are your records as well controlled under a managed process to the same extent as your firearms?
Your initial reaction might be a rapid ‘no,’ but take a moment to think about it. Your paperwork is your documentation – your proof – of the culture of compliance at your FFL. You run required background checks in every required situation. You refuse to transfer firearms to those denied by NICS. You sweat inventory reconciliation, from the book of acquisitions and dispositions to the physical inventory to security. You have as many FFL licenses as are necessary to support each of your business functions.
Then why not have policies and procedures to govern handling, retaining, and terminal outcomes for all of your mandatory paperwork?
The cornerstone of compliance is having documented policies and procedures. We recommend these written instructions as the first, necessary step, in getting compliant. The policy should do the following: define the required papers, contain an attached a current sample of the required papers, state the storage parameters of the required papers, and state the ultimate dispositions for the required papers. Sample firearms-specific, even records-specific policies already exist! They can be found on the Orchid Advisors Firearms Industry Portal!
For example, with respect to the ATF Form 4473, the policy would identify, define, and attach the April 2012 version. It would distinguish between handling in three categories, those approved, those delayed, and those denied. A corresponding system would be identified for any additional forms connected with any firearm transfer, like proof of a valid FFL and/or sales of multiple firearms. The policy would set out how the Form 4473 are to be organized, who is responsible to manage the completed transaction forms, including any off-site storage and retrieval mechanisms.
Don’t overlook the opportunity to build into your forms policy that the employee managing these forms can also serve an internal auditing function. You can develop procedures for random sampling as forms come into storage, are prepared to go off-site for storage, and even once in long-term storage. This kind of internal audit can include even the most simple, yet common sense functions, to do things like a physical walk-through the off-site storage facility to ensure that the vendor is properly managing boxes, is properly sheltered from the weather, including water damage, and is protected against rodents and other paper hazards.
Now, let’s also consider the value of having a procedure in place for how to handle a missing document. The simple approach is for you to take out your policy/ procedure for locating a firearm missing from inventory and apply it to paperwork missing from archives. It would involve a process by which all measures are exhausted, based on the information you already know; who had it last?
Let’s use an example that is quite simple, but which will allow you to consider how to design a procedure reflective of your FFL.
In our hypothetical, let’s assume a private sale of a handgun between two individuals, across state lines through a local and a corresponding foreign FFL. The scenario might be that the individual seller lost his proof of sale, as needed to remove a handgun from a permit.
The local FFL should have logged the firearm into the acquisitions and dispositions book, which would be the first record to check, including the date of bringing the firearm into inventory and the date of transferring the firearm out of inventory. The A&D book is a required record of the FFL. The local FFL is also required to obtain a copy of a valid FFL prior to shipping the firearm, and this can provide another point of reference during a transaction reconstruction process.
Alternatively, the individual seller could contact the foreign FFL, which would also have the firearm booked into its A&D book as to date of receipt from the local FFL and release from inventory to the approved buyer. The foreign FFL would also have the Form 4473. The foreign FFL may also be able to use these records to locate the payment transaction. With these pieces, the foreign FFL should be able to supply the individual seller with a Bill of Sale (if not already provided, copied, and part of the file) and any accompanying Affidavit that may be appropriate, depending on the amount of time that has passed.
What you’re really after when you handle paperwork as an FFL are the separate, required papers and how those papers interconnect. There is overlap. The serial number of a firearm, for example, finds its way into multiple entries.
Whether you conduct statistical samplings of your FFL records or have to locate or reconstruct a missing record, the paperwork requirements of the FFL are as serious as the regulations governing the firearms themselves. In either, lax compliance can result in potential adverse action taken against your license. In a healthy compliance environment, the ability to demonstrate the results of your effort will go a long way.
Now fill up your insulator mug and go pull the string to the lightbulb in the attic.