Civilian Marksmanship Program: Corporation Needs to Fully Comply With the
Law on Sales of Firearms (Letter Report, 01/12/99, GAO/NSIAD-99-41).

Pursuant to a congressional request, GAO reviewed the Corporation for
the Promotion of Rifle Practice and Firearms Safety's administration of
the Civilian Marksmanship Program (CMP), focusing on: (1) whether CMP's
conversion to a private corporation and the Corporation's subsequent
firearms sales were conducted in accordance with the 1996 National
Defense Authorization Act; (2) the types and value of federal support
provided to the Corporation; and (3) the types and number of firearms
the Army transferred to the Corporation and was storing for potential
transfer.

GAO noted that: (1) the Army and the Corporation completed the
transition of the CMP to the Corporation on September 30, 1996, in
accordance with the 1996 act; (2) the Corporation has not routinely
ensured that it complied with the requirements of the 1996 act in its
firearms sales to individuals; (3) GAO estimates that the Corporation
sold between 1,200 and 2,200 M1 Garand rifles without adhering to its
own procedures that were designed to ensure that the purchasers were not
convicted of felonies, were U.S. citizens, and were members of a
Corporation-affiliated club; (4) the Army and other defense agencies had
provided more than $19 million in support to the Corporation as of
September 30, 1998; (5) for support provided on a reimbursable basis,
Corporation officials told GAO the Corporation reimbursed the Army and
other defense organizations more than $1 million; (6) additional
support, including obtaining background investigations of prospective
gun buyers, was provided to the Corporation at a cost of more than
$440,000 but was not specifically referred to in the act and was not
reimbursed by the Corporation; (7) the Secretary of the Army has not
prescribed regulations relating to the logistical support to be provided
to the Corporation and reimbursement for that support, even though the
1996 act required the Secretary to do so; (8) several Army officials
told GAO they were uncertain as to what support they should be providing
and how to arrange for reimbursement from the Corporation for expenses
incurred by the Army; (9) as of September 30, 1998, the Army had
transferred more than 56,000 firearms to the Corporation; (10) at
transition, the Army transferred to the Corporation all of the required
firearms except those at Anniston Army Depot; (11) as of September 30,
1998, the Army was storing more than 230,000 M1 Garands, over 35,000 .22
caliber rifles, and more than 4,000 other firearms at Anniston for
potential transfer to the Corporation; (12) at that time, the Army and
the Corporation were negotiating a new memorandum of understanding that
would make any of these firearms that were surplus to Army requirements
available for transfer to the Corporation; (13) Army officials told GAO
that some of these firearms were not at Anniston under CMP control on
February 9,1996; and (14) should the Army decide to transfer firearms
that were not under CMP control on February 9, 1996, legislative
authority other than section 1615 of the act would be needed.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-99-41
     TITLE:  Civilian Marksmanship Program: Corporation Needs to Fully 
             Comply With the Law on Sales of Firearms
      DATE:  01/12/99
   SUBJECT:  Firearms
             Gun control law
             Army supplies
             Sales
             Nonprofit organizations
             Sports
             Intergovernmental fiscal relations
             Internal controls
             Noncompliance
             Surplus federal property
IDENTIFIER:  Army Civilian Marksmanship Program
             M1 Garand Rifle
             M1 Carbine
             Army Master Data File
             National Instant Criminal Check System
             
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Cover
================================================================ COVER


Report to Congressional Requesters

January 1999

CIVILIAN MARKSMANSHIP PROGRAM -
CORPORATION NEEDS TO FULLY COMPLY
WITH THE LAW ON SALES OF FIREARMS

GAO/NSIAD-99-41

Civilian Markmanship Program

(703240)


Abbreviations
=============================================================== ABBREV

  ATF - Bureau of Alcohol, Tobacco, and Firearms
  CMP - Civilian Marksmanship Program
  DOD - Department of Defense
  DSS - Defense Security Service

Letter
=============================================================== LETTER


B-281768

January 12, 1999

The Honorable Frank R.  Lautenberg
United States Senate

The Honorable Carolyn B.  Maloney
House of Representatives

This report responds to your request regarding the Civilian
Marksmanship Program (CMP), which until 1996 was administered by the
Department of the Army.  As required by the Fiscal Year 1996 National
Defense Authorization Act, the program was to be transitioned from
the Army to the private, nonprofit Corporation for the Promotion of
Rifle Practice and Firearms Safety, which was established by this
law.\1 The program is designed to promote and monitor marksmanship
training through a system of affiliated clubs and to sponsor
marksmanship competitions.\2 As part of these activities, the
Corporation sells certain surplus military firearms to the affiliated
clubs and their members.  In response to your request, we determined
(1) whether the program's conversion to a private corporation and the
Corporation's subsequent firearms sales were conducted in accordance
with the 1996 act, (2) the types and value of federal support
provided to the Corporation, and (3) the types and number of firearms
the Army transferred to the Corporation and was storing for potential
transfer.  In August 1998, we provided information you requested
regarding the Army's investigation of alleged criminal activity
within the CMP when it was an Army program.\3


--------------------
\1 Corporation for the Promotion of Rifle Practice and Firearms
Safety Act, title XVI of P.L.  104-106 (Feb.  10, 1996) ("the act"). 

\2 Under section 1612(b) of P.L.  104-106, the Corporation is
directed to give priority under the CMP to activities that benefit
firearms safety, training, and competition for youth and that reach
as many youth participants as possible. 

\3 Army Investigation of Civilian Marksmanship Program
(GAO/OSI-98-14R, Aug.  18, 1998). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The Army and the Corporation for the Promotion of Rifle Practice and
Firearms Safety completed the transition of the CMP to the
Corporation on September 30, 1996, in accordance with the 1996 act. 
The 1996 act authorized the Corporation to sell firearms but did not
specify any external oversight to ensure that the Corporation's
firearms sales complied with the act.  The Corporation has not
routinely ensured that it complied with the requirements of the 1996
act in its firearms sales to individuals.  On the basis of a random
sample of the 6,400 M1 Garand rifle sales between July 1997 and
August 1998, we estimate that the Corporation sold between 1,200 and
2,200 M1 Garands without adhering to its own procedures that were
designed to ensure that the purchasers were not convicted of
felonies, were U.S.  citizens, and were members of a
Corporation-affiliated club. 

The Army and other defense agencies had provided more than $19
million in support to the Corporation as of September 30, 1998.  More
than $17.5 million of that support was authorized by the 1996 act to
be provided without reimbursement.  For support provided on a
reimbursable basis, Corporation officials told us the Corporation
reimbursed the Army and other defense organizations more than $1
million for such things as the inspection, repair, and shipping of
firearms.  However, additional support, including obtaining
background investigations of prospective gun buyers, was provided to
the Corporation at a cost of more than $440,000 but was not
specifically referred to in the act and was not reimbursed by the
Corporation.  Also, the Secretary of the Army has not prescribed
regulations relating to the logistical support to be provided to the
Corporation and reimbursement for that support, even though the 1996
act required the Secretary to do so.  Army headquarters officials
told us existing regulations governing support to outside
organizations were considered sufficient to cover the support to the
Corporation.  Notwithstanding that view, several Army officials told
us they were uncertain as to what support they should be providing
and how to arrange for reimbursement from the Corporation for
expenses incurred by the Army. 

As of September 30, 1998, the Army had transferred more than 56,000
firearms to the Corporation, including M1 Garands, M1 Carbines, M14s,
.22 caliber rifles, and pistols.  Firearms transferred but not sold
are stored by the Corporation.  Under section 1615 of the act, the
Secretary of the Army was required to transfer to the Corporation all
firearms under the control of the Army's CMP Director on February 9,
1996, including M1 Garand and .22 caliber rifles stored at the
Anniston Army Depot in Anniston, Alabama.  These firearms were to be
transferred as and when necessary to enable the Corporation to issue,
loan, or sell them in accordance with the act.  At transition, the
Army transferred to the Corporation all of the required firearms
except those at Anniston.  As of September 30, 1998, the Army was
storing more than 230,000 M1 Garands, over 35,000 .22 caliber rifles,
and more than 4,000 other firearms at Anniston for potential transfer
to the Corporation.  At that time, the Army and the Corporation were
negotiating a new memorandum of understanding that would make any of
these firearms that were surplus to Army requirements available for
transfer to the Corporation.  Army officials told us that some of
these firearms were not at Anniston under CMP control on February 9,
1996.  Should the Army decide to transfer firearms that were not
under CMP control on February 9, 1996, legislative authority other
than section 1615 of the act would be needed. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The CMP originated in 1903 with the establishment of the National
Board for the Promotion of Rifle Practice, which advised the
Secretary of War.  The general purpose of the program was to
encourage individuals to develop marksmanship skills to prepare them
in the event that they were called upon to serve during wartime. 
Congress directed the Department of Defense (DOD) to assume
management of the CMP, including authorizing the detail of a Marine
or Army officer as director of civilian marksmanship and the detail
of Army members to provide weapons instruction to civilians and rifle
clubs.  The Secretary of the Army was required to provide for such
things as (1) the operation and maintenance of rifle ranges, (2) the
promotion of firearms practice and the conduct of matches and
competitions, and (3) the sale of firearms to affiliated gun clubs
that provide firearms training and to U.S.  citizens over 18 years of
age who are members of those clubs. 

In response to a request from the then House Armed Services
Committee, we issued a 1990 report on the CMP's mission, purpose,
usefulness, and cost.\4 We concluded that the Army's CMP was of
limited value because, among other things, the CMP's objectives and
goals were not linked to Army mobilization and training plans.  We
also reported that the Army's proposed CMP budget for fiscal years
1990-94 was about $5 million a year.  The Fiscal Year 1996 National
Defense Authorization Act required the CMP to be transitioned from a
DOD appropriated fund activity to a nonprofit corporation that was
established by this act. 

The act required the Secretary of the Army to transfer to the
Corporation all firearms and ammunition under the control of the
Army's CMP Director on February 9, 1996, and to transfer funds
derived from sales programs and various other sources.  In addition,
the 1996 act authorized the Corporation, as the Army previously had
been authorized, to sell firearms to U.S.  citizens.  Under the act,
the Corporation was authorized to sell firearms to individuals who
(1) have not been convicted of a felony, (2) are U.S.  citizens over
18 years of age, and (3) are members of Corporation-affiliated gun
clubs.  Also, the Corporation was prohibited from selling firearms to
individuals who had been convicted of firearms violations under 18
U.S.C.  922; these violations include knowingly shipping or
transporting stolen firearms or ammunition in interstate or foreign
commerce.  The 1996 act also provided that the Corporation's sales
are subject to applicable federal, state, and local laws.  These laws
include, among others, provisions of the Gun Control Act of 1968 that
prohibit certain categories of persons from purchasing firearms.\5

To facilitate the transition of the CMP from the Army to the
Corporation, the 1996 act authorized and directed the Secretary of
the Army to take a number of actions.  For example, the act
authorized the Secretary to provide specific support to the program,
such as the storage of firearms, without reimbursement by the
Corporation.  The act also authorized the Secretary to provide other
logistical support to the CMP, such as support for competitions and
other activities, with reimbursement from the Corporation for
incremental direct costs incurred by the Army to provide such
support.  Also, the act required the Secretary of the Army to
prescribe implementing regulations for carrying out this support. 


--------------------
\4 Military Preparedness:  Army's Civilian Marksmanship Program Is of
Limited Value (GAO/NSIAD-90-171, May 23, 1990). 

\5 These include any person who (1) has been convicted of a crime
punishable by imprisonment for more than a year, (2) is a fugitive
from justice, (3) is an unlawful user of any controlled substance,
(4) is an adjudged mental defective, (5) is subject to certain
restraining orders related to domestic violence, or (6) has been
convicted of a misdemeanor crime of domestic violence (18 U.S.C. 
922(g)). 


   PROGRAM TRANSITION MET
   STATUTORY REQUIREMENTS
------------------------------------------------------------ Letter :3

The transition of the CMP from the Army to the Corporation was
completed on September 30, 1996, in accordance with the Corporation
for the Promotion of Rifle Practice and Firearms Safety Act.  The
Secretary of the Army transferred (1) all property under the control
of the Director of Civilian Marksmanship, the Civilian Marksmanship
Support Detachment, and the National Match Fund, including office
equipment, targets and frames, vehicles, supplies, and appliances;
(2) control of the leased property that had been occupied by the
Civilian Marksmanship Support Detachment in Port Clinton, Ohio; and
(3) all funds available from sales programs and fees to the National
Board for the Promotion of Rifle Practice and all funds in a
nonappropriated fund account known as the National Match Fund.  These
transfers were completed by September 30, 1996.  Also, the Secretary
of the Army, as required, appointed on July 12, 1996, the
Corporation's initial Board of Directors.  As required, the
Corporation's Board of Directors appointed in July 1996 a Director of
Civilian Marksmanship to be responsible for the daily operations of
the CMP.  The CMP began operations under the Corporation on October
1, 1996. 


   CORPORATION POLICIES
   INADEQUATE, AND PROCEDURES TO
   ENSURE FIREARMS SALES COMPLY
   WITH THE ACT NOT FOLLOWED
------------------------------------------------------------ Letter :4

The Corporation has not routinely ensured that its sales of firearms
to individuals complied with the requirements of the 1996 act.  The
Corporation could make sales under the act to purchasers that (1) had
not been convicted of a felony or otherwise ineligible to purchase a
firearm, (2) were U.S.  citizens over 18 years of age, and (3) were
members of gun clubs affiliated with the Corporation.  The act also
required the Corporation to establish procedures to obtain a criminal
records check for purchasers with appropriate federal and state
authorities.  Corporation officials told us that they had policies
and procedures in place to ensure that the requirements of the 1996
act for firearms sales to individuals were met.  We reviewed these
policies and procedures and found that in some cases the
Corporation's policies were not adequate to ensure that the
purchasers met the requirements of the act.  In other cases, the
Corporation did not adhere to its own procedures that could have
ensured that the purchasers met the requirements.  As a result, the
Corporation sold firearms to individuals without ensuring that
purchasers were not convicted of a felony or otherwise ineligible to
purchase a firearm, were U.S.  citizens, and were members of
Corporation-affiliated clubs. 


      CORPORATION FIREARMS SOLD
      AND ON LOAN
---------------------------------------------------------- Letter :4.1

According to Corporation officials, the Corporation sold 22,584
firearms in the 2-year period between October 1, 1996, and September
30, 1998.  Of these firearms, the Corporation sold 16,637 (74
percent) to individuals and 5,947 (26 percent) to some of its 1,033
affiliated clubs.  Over 72 percent of all firearms sold were M1
Garands, a World War II era semiautomatic rifle, for which the
Corporation as of September 1998 charged from $400 to $750 each,
depending on the rifle's condition.  Figure 1 depicts the
.30 caliber M1 Garand. 

   Figure 1:  M1 Garand
   Semiautomatic Rifle

   (See figure in printed
   edition.)

   Source:  Small Arms of the
   World , 11th ed.  (Harrisburg,
   Pa.:  Stackpole Books, 1997),
   p.  532.

   (See figure in printed
   edition.)

Regarding firearms on loan, Corporation officials said that 905 M14s
remained on loan to certain affiliated clubs as of September 30,
1998.\6 These officials told us that the Army had lent the M14s to
those clubs when it operated the program but that the Corporation is
not lending any additional firearms because of liability issues. 
Table 1 depicts the number and types of firearms sold by the
Corporation. 



                                Table 1
                
                Firearms Sold by the Corporation During
                       Fiscal Years 1997 and 1998

                                           Sold to     Sold to
Firearm                                individuals       clubs   Total
--------------------------------  ----------------  ----------  ======
M1 Garand\a                                 14,947       1,392  16,339
M1D\a                                        1,379           0   1,379
M1 Carbine\a                                     0         597     597
M1903A3\a                                       39           0      39
.22 caliber                                    272       3,278   3,550
Air rifle                                        0         680     680
======================================================================
Total                                       16,637       5,947  22,584
----------------------------------------------------------------------
\a .30 caliber rifle. 

We did not review the sales of firearms to Corporation-affiliated
clubs.  Many of the clubs had been established when the Army ran the
CMP and some of the data needed to determine whether procedures had
been followed either were not maintained by the Army or were
indecipherable in the microfiche files the Army provided to the
Corporation. 


--------------------
\6 These rifles remain on loan only to clubs that are
Corporation-affiliated state associations (one in each state) for the
use of the state rifle team. 


      CORPORATION'S APPLICATION
      POLICIES INSUFFICIENT TO
      ENSURE FIREARMS WERE SOLD
      ONLY TO ELIGIBLE PURCHASERS
---------------------------------------------------------- Letter :4.2

The Corporation's application policies were insufficient to ensure
that it did not sell firearms to persons who were convicted of a
felony or otherwise ineligible to purchase a firearm or who were not
U.S.  citizens.  For example, the Corporation's policy required a
background investigation before a firearm purchase was approved. 
However, Corporation policy also allowed individual applicants to
provide various documents in lieu of a background investigation.  Of
the 16,637 firearms sales to individuals during fiscal years 1997 and
1998, Corporation officials estimated that they requested background
investigations for about 8,000 applicants. 

The Corporation obtained background investigations from the Defense
Security Service (DSS).  DSS investigations included a name search
and fingerprint check by the Federal Bureau of Investigation for
felonies and other conditions that would render an individual
ineligible to purchase a firearm.  As is customary when DSS manages
these investigations, DSS made no assessment regarding an
individual's eligibility to purchase a firearm but instead provided
the raw results of the investigations to Corporation employees to
enable them to make this determination.  However, the Corporation had
no written guidelines for its employees to use to identify items in
the DSS investigation that would disqualify individuals from
purchasing firearms. 

In lieu of a DSS investigation, Corporation policy allowed applicants
to provide one of the following documents: 

  -- a dated letter from the applicant's security manager verifying
     that the applicant is a current U.S.  servicemember, government
     employee, or contractor with a current U.S.-issued security
     clearance;

  -- a notarized or certified true copy of an applicant's current
     military security clearance if the applicant is active duty
     military;

  -- a letter from the chief of police or sheriff attesting to the
     applicant's good character if the applicant is a sworn law
     enforcement officer; or

  -- a notarized copy of a current concealed weapons permit. 

The first two of these documents are not sufficient to determine
whether individuals were convicted of a felony or were otherwise
ineligible to purchase a firearm.  Possession of a current
U.S.-issued security clearance does not mean that criminal records
checks with appropriate federal and state law enforcement agencies
have been conducted recently or that individuals were not convicted
of a felony or otherwise ineligible to purchase a firearm.  DOD
personnel security officials told us that some persons with current
security clearances may have had their last criminal records checks
as many as 10, 15, or even 20 years ago.  Also, these officials told
us that organizations issuing security clearances have the discretion
to consider mitigating factors to individuals' past behavior and thus
sometimes issue clearances to individuals who have, for example,
felony convictions or other criminal behavior on their records. 

The Corporation's policies also were insufficient to ensure that
purchasers were U.S.  citizens.  The Corporation required applicants
to certify that they were U.S.  citizens and accepted as evidence of
citizenship a copy of applicants' birth certificates, voter
registration cards, proof of naturalization, passports, or
certificates of release/discharge from active duty (DD 214).  While
most of these documents provide sufficient evidence of citizenship, a
certificate of release/discharge from active duty does not.  Military
personnel may be either U.S.  citizens or permanent residents, and
because the DD 214 does not contain information on individuals'
citizenship, it does not ensure that the citizenship requirement has
been met. 


      CORPORATION DID NOT FOLLOW
      ITS OWN PROCEDURAL
      REQUIREMENTS
---------------------------------------------------------- Letter :4.3

The Corporation did not always follow its own procedural requirements
and therefore could not ensure that individuals met the statutory
requirements for the purchase of firearms.  We randomly examined
samples of the Corporation's sales records for three types of
firearms sold to individuals:  M1 Garand, M1D, and .22 caliber
rifles.  These firearms accounted for 99 percent of the Corporation's
firearms sales to individuals.  Based on all three random samples, we
found the following: 

  -- The Corporation sold firearms without obtaining a DSS background
     investigation for some purchasers who submitted no substitute
     documents as evidence that a qualifying background investigation
     had been conducted.  Additionally, investigations were not
     obtained for some individuals because they had previously
     purchased firearms through the CMP.  The Corporation neither
     verified that an investigation had been conducted for the prior
     purchase, some as many as 5 years before, nor conducted a search
     to account for any prohibited activity in the intervening years. 
     The Corporation also accepted state firearms licenses other than
     concealed weapons permits in lieu of a background investigation
     without evidence that an investigation was conducted as a part
     of issuing the licenses. 

  -- The Corporation sold firearms to individuals who provided no
     proof of citizenship or who provided drivers' licenses as proof
     of citizenship. 

  -- The Corporation sold firearms to persons who did not submit any
     proof of membership in a Corporation-affiliated gun club or
     submitted an expired membership card or a membership card with
     no name. 

Table 2 shows how often the applicants in our three randomly selected
samples did not provide an item the Corporation's policy allowed as
proof of meeting the requirements for a firearm purchase.  For each
type of firearm sale we sampled, documentation was insufficient to
ensure the requirements were met.  For example, 37 (27 percent) of
the 136 M1 Garand sales we reviewed were insufficiently documented. 
Projecting our sample results to the approximately 6,400 M1 Garand
sales over the 14-month period from which we sampled, we estimate
that the Corporation sold between 1,200 and 2,200 M1 Garands to
individuals without adhering to its procedures designed to ensure
that purchasers met the requirements of the 1996 act.  We also
randomly sampled M1D and
.22 caliber rifle sales.  Relative to the overall rate for the M1
Garand sales, proportionately fewer M1D and .22 caliber rifle sales
met the Corporation's requirements for ensuring compliance with the
act.  We could not project the results of our samples for M1D and .22
caliber rifle sales to a universe of those sales because of our small
sample sizes. 



                                     Table 2
                     
                        Purchases the Corporation Approved
                       Without Following Its Procedures to
                       Ensure Compliance With the 1996 Act

                                    M1 Garand          M1D         .22 Caliber
                                   (Sample size    (Sample size    (Sample size
                                       136)            29)             38)
                                  --------------  --------------  --------------
                                          Percen          Percen          Percen
Requirement not assured\a         Number       t  Number       t  Number       t
--------------------------------  ------  ------  ------  ------  ------  ------
U.S. citizenship                       6       4      10      34      13      34
Club membership                       13      10       8      28       8      21
No felony conviction or other         26      19      11      38      22      58
 ineligibility
================================================================================
Purchases for which Corporation       37      27      12      41      23      61
 failed to ensure compliance
 with at least one requirement
--------------------------------------------------------------------------------
\a Some purchases did not meet several requirements

Regarding resales, Corporation officials told us that each individual
purchaser of a firearm is required to sign a statement that the
firearm is for his or her personal use.  These officials told us
that, practically speaking, however, they could not control the
resale of firearms.  According to Army and Corporation officials, the
Army's CMP program allowed an individual only one lifetime purchase
of each type of firearm.  The Army restriction may have limited the
number of firearms available for resale.  In contrast, the
Corporation has adopted a policy that allows an individual to
annually purchase two M1 Garands and one of each other type of
firearm sold to individuals by the Corporation. 


   NO EXTERNAL OVERSIGHT TO ENSURE
   CORPORATION FIREARMS SALES
   COMPLY WITH THE 1996 ACT
------------------------------------------------------------ Letter :5

The 1996 act authorized the Corporation to sell firearms but did not
specify any external oversight to ensure compliance of these sales
with the 1996 act.  Thus, the Corporation is not subject to the
licensing and oversight requirements of firearms dealers who are
regulated by the Bureau of Alcohol, Tobacco and Firearms (ATF) under
the Gun Control Act of 1968.  Specifically, these dealers must file
an application with the ATF, which reviews the applications and
inspects applicants to determine their qualifications for licenses. 
License holders are then subject to periodic compliance inspections
by the ATF.  Although not regulated by the ATF, the Corporation is
subject to Internal Revenue Service requirements applicable to
tax-exempt organizations, including the reporting of its gross
income, receipts, and disbursements.  Corporation officials told us
that to comply with this requirement, the Corporation obtains an
independent financial audit each year. 

While the act required the Army to provide firearms to the
Corporation, it did not authorize the Army to oversee the
Corporation's firearms sales.  However, a 1996 memorandum of
understanding between the Army and the Corporation requires the
Corporation to certify in writing that sales have met statutory
requirements before the Army ships firearms to a purchaser. 
According to Army and Corporation officials, however, the Army has
never denied a request from the Corporation to ship a firearm, even
though the Corporation has not provided the certifications. 
Corporation officials said that it was logistically impossible to
certify every firearm sale in writing.  Army officials said that the
Corporation is solely responsible for ensuring that firearms
recipients have met the statutory requirements. 


   DOD PROVIDES CONTINUED SUPPORT
   TO THE CMP
------------------------------------------------------------ Letter :6

DOD provided more than $19 million in support to the Corporation
during the transition and the 2 years of the Corporation's existence. 
More than $17.5 million of that support was authorized by the 1996
act to be provided without reimbursement.  This included about $7.7
million in assets provided to the Corporation by the Army during the
transition of the CMP as required by the 1996 act.  These assets
included funds, firearms, ammunition, trophies, equipment, and
vehicles (see table 3). 



                                Table 3
                
                Property Transferred to the Corporation
                        at Transition of the CMP

                         (Dollars in thousands)

Type of support                                                  Value
------------------------------------------------------  --------------
Funds                                                         $3,800\a
Firearms                                                     1,094\b,c
Ammunition                                                     2,172\c
Trophies, equipment, and vehicles                                614\c
======================================================================
Total                                                           $7,680
----------------------------------------------------------------------
\a As reported in Army transition documents. 

\b This figure represents the value of 6,512 firearms transferred to
the Corporation. 

\c As reported by the Army Audit Agency on September 27, 1996. 

Since the transition, DOD has provided unreimbursed support worth
more than $10.3 million to the Corporation through September 30,
1998.  Most of the support provided (more than $9.9 million) was
specifically authorized by the 1996 act to be provided on a
nonreimbursable basis.  This support included firearms, ammunition,
and repair parts.  According to Army officials, providing these items
to the Corporation actually resulted in a cost savings because the
alternatives were either to incur costs to continue storing the items
or to incur costs to demilitarize them.  We were unable to determine
the total cost of unreimbursed DOD support because DOD officials did
not know the value of some items of support, such as firearms
storage.  In addition, according to Corporation officials, as of
September 30, 1998, DOD had provided more than $1 million in support
for which it was reimbursed.  This support included the inspection,
repair, and shipping of firearms. 

The 1996 act does not specifically refer to other DOD support that is
being provided without reimbursement.  For example, DSS has provided
background investigations for the Corporation since October 1, 1996. 
Based on the Corporation's estimate that it had requested 8,000
investigations in fiscal years 1997 and 1998, DSS officials estimated
that the value of the investigations was $440,000.  Additionally,
since October 1997, the Army has allowed the Corporation to use a
building at the Anniston Army Depot.  The Corporation uses this
building for office space and for workspace to prepare some of the
firearms for shipment to purchasers.  Army officials told us that
although the Corporation has paid for the direct incremental costs of
utilities, police services, and refuse collection and disposal, the
building itself (a 13,551 square-foot warehouse) has been provided to
the Corporation rent free.  Table 4 shows the value of unreimbursed
direct support provided to the Corporation since October 1, 1996. 



                                Table 4
                
                   Value of Unreimbursed DOD Support
                  Provided to the Corporation (Oct. 1,
                     1996, through Sept. 30, 1998)

                         (Dollars in thousands)

Type of support                                                  Value
------------------------------------------------------------  --------
Specifically authorized wit reimbursement by the 1996
----------------------------------------------------------------------
Firearms                                                      $5,702\a
                                                                    ,b
Ammunition                                                     3,833\b
Repair parts                                                   211\b,c
Surplus material and equipment                                    37\b
Support for national matches (Army Reserve personnel)              124
Storage of firearms                                                Not
                                                               known\d
======================================================================
Subtotal                                                         9,907
Not specifically referred to by the 1996 act
Background checks                                                  440
Storage of ammunition and other supplies                           Not
                                                               known\d
Building at Anniston Army Depot for Corporation use                Not
                                                               known\d
Subtotal                                                           440
======================================================================
Total                                                          $10,347
----------------------------------------------------------------------
\a This represents the value of 49,906 firearms transferred after
transition. 

\b Based on Army Master Data File values. 

\c Does not include the value of about 500 telescopes and cases. 
Army officials told us they did not have records on the value of
these items. 

\d Army officials told us they did not know the value of these items. 

The Secretary of the Army did not issue regulations relating to the
logistical support to be provided to the Corporation and
reimbursement for that support as required by the act.  The
Corporation has separate written agreements with several Army and
other DOD organizations, such as Anniston Army Depot and the Defense
Logistics Agency's Defense Reutilization Marketing Service, that
provide the Corporation support.  However, we found inconsistencies
in and confusion among officials responsible for providing such
support.  Some Army officials responsible for providing support told
us they were unsure of what support they should be providing to the
Corporation and how to arrange for reimbursement of expenses.  For
example, the Corporation pays administrative expenses for Army
personnel involved with the transfer of firearms from the Army to the
Corporation but is not charged administrative expenses for Army
personnel involved with the transfer of ammunition.  According to
Army headquarters officials, new regulations for support to the CMP
were not prescribed because they believed existing regulations
pertaining to the support of outside organizations were sufficient to
cover support to the Corporation.\7


--------------------
\7 Notwithstanding our request, the Army did not identify these
regulations during our review. 


   ARMY TRANSFERRED FIREARMS TO
   THE CORPORATION AND HOLDS MORE
   FOR POTENTIAL FUTURE TRANSFER
------------------------------------------------------------ Letter :7

As of September 30, 1998, the Army transferred more than 56,000
firearms to the Corporation.  Of this number, the Army transferred
about 6,500 firearms at the time of transition, including 401 M16s
that the Corporation returned and plans to borrow as needed.  Over
the 2-year period since the transition, almost 50,000 firearms were
transferred to the Corporation.  All totaled, more than a dozen
different types of firearms have been transferred, including M1
Garands, M1 Carbines, M14s, .22 caliber rifles, and pistols.  As of
September 30, 1998, the Army was storing about 270,000 additional M1
Garands, .22 caliber rifles, M1 Carbines, and other firearms for
potential transfer. 

Table 5 shows the types and numbers of firearms transferred to the
Corporation as of September 30, 1998. 



                                Table 5
                
                     Types and Numbers of Firearms
                Transferred to the Corporation (through
                            Sept. 30, 1998)

                                  Transferred to the Corporation
                            ------------------------------------------
Firearms                       At transition    FY 1996-98       Total
--------------------------  ----------------  ------------  ==========
.30 caliber rifle
M1 Garand                              1,216        28,288      29,504
M1C                                        0            74          74
M1D                                        0         2,385       2,385
M1 National Match                         72             0          72
M1 Carbine                               200         1,126       1,326
M1A1                                       9             0           9
M14                                    1,314             0       1,314
M16                                      401             0       401\a
M1903A3                                    4           622         626
M1903A4                                    0           411         411
.22 caliber rifle                      2,614        17,000      19,614
7.62mm M700                                1             0           1
Pellet                                     1             0           1
Shotgun                                    4             0           4
Pistol                                   676             0         676
======================================================================
Total                                  6,512        49,906      56,418
----------------------------------------------------------------------
\a The Corporation returned the M16s to the Army and plans to borrow
them as needed. 

The majority of the 6,512 firearms transferred at transition (4,581)
were on loan to CMP-affiliated clubs, while the remainder (1,931)
were under the control of the Civilian Marksmanship Support
Detachment in Ohio.  Army officials told us that all of the firearms
transferred after the transition were stored at Anniston Army Depot
and were deemed excess by the Army.  The Army transferred firearms
either directly to the Corporation or to recipients designated by the
Corporation. 

As of September 30, 1998, the Army had transferred 56,418 firearms to
the Corporation, including M1 Garands, M1 Carbines, M14s, .22 caliber
rifles, and pistols.  Under section 1615 of the act, the Secretary of
the Army was required to transfer to the Corporation those firearms
under the control of the Army's CMP Director on February 9, 1996,
including all M1 Garand and .22 caliber rifles stored at Anniston. 
These firearms were to be transferred as and when necessary to enable
the Corporation to issue, loan, or sell them in accordance with the
act.  At transition, the Army transferred to the Corporation all of
the required firearms except those at Anniston.  On September 30,
1996, the Army and the Corporation signed a memorandum of
understanding in which the parties agreed that approximately 167,000
M1 Garands and 17,000 .22 caliber rifles were at Anniston under CMP
control on February 9, 1996. 

As of September 30, 1998, the Army was storing more than 230,000
M1 Garands, over 35,000 .22 caliber rifles, and over 4,000 other
firearms at Anniston for potential transfer to the Corporation.  At
that time, the Army and the Corporation were negotiating a new
memorandum of understanding that could make these firearms available
to the Corporation.  However, Army officials told us that some of
these firearms were not at Anniston under CMP control on February 9,
1996.  Should the Army decide to transfer firearms from Anniston that
were not under CMP control on February 9, 1996, legislative authority
other than section 1615 of the act will be needed. 

Table 6 shows the types, numbers, and values of firearms stored at
Anniston Army Depot for potential transfer to the Corporation as of
September 30, 1998.  Corporation officials said that the Army is
their only source of firearms. 



                                Table 6
                
                 Firearms Stored for Potential Transfer
                  to the Corporation (as of Sept. 30,
                                 1998)

Firearm                                       Quantity         Value\a
--------------------------------------  --------------  --------------
M1 Garand                                      230,590     $21,744,637
M1C                                                  1             220
M1D                                                 29           7,975
M1 Carbine                                       3,052         234,699
M1903A3                                          1,016         108,712
.22 caliber rifle                               35,056       8,366,176
======================================================================
Total                                          269,744     $30,462,419
----------------------------------------------------------------------
\a Based on Army Master Data File values. 


   CONCLUSIONS
------------------------------------------------------------ Letter :8

When Congress authorized the transfer of the CMP to a private,
nonprofit corporation established by the act, it established specific
requirements for the Corporation's sale of firearms, for continued
Army support of the program, and for the number of firearms to be
transferred to the Corporation.  To ensure that these requirements
are met, oversight of Corporation sales of firearms and more specific
guidance describing the logistical support to be provided are needed. 


   RECOMMENDATION
------------------------------------------------------------ Letter :9

We recommend that the Secretary of the Army issue regulations, as
required by the 1996 act, addressing the logistical support to be
provided to the Corporation and the policies for obtaining
reimbursement from the Corporation for such support. 


   MATTER FOR CONSIDERATION
----------------------------------------------------------- Letter :10

When Congress established the Corporation as a private nonprofit
organization, it did not specify any external oversight to ensure
that the Corporation fully comply with the Corporation for the
Promotion of Rifle Practice and Firearms Safety Act of 1996 in its
sales of firearms.  However, because the federal government
established the Corporation and continues to provide firearms and
other support, the federal government has an interest in ensuring
that Corporation assets are being appropriately safeguarded. 
Therefore, Congress may wish to consider amending the act to require
that the Corporation's annual financial audit include an assessment
of, and report on, its compliance with the 1996 act.  Such an
assessment should include an examination of the Corporation's
relevant internal controls.  In addition, Congress may wish to
require that the auditor's report be provided to Congress. 


   DOD COMMENTS AND OUR EVALUATION
----------------------------------------------------------- Letter :11

In written comments on a draft of this report, DOD concurred with our
recommendation in principle.  DOD stated that existing regulations
prescribe guidance to address the logistical support provided by the
Army and the policies for obtaining reimbursement for such support. 
DOD further stated that these regulations were being reviewed for
appropriateness and would be provided to the Corporation, along with
the memorandum of understanding, in response to the legislative
requirement for regulations. 

DOD stated that existing regulations prescribe guidance to address
logistical support provided by the Army.  However, DOD did not assert
that these regulations were appropriate to address the unique type of
logistical support that the Army provides to the Corporation. 
Instead, DOD stated that they were currently reviewing these
regulations for appropriateness.  As noted in our draft report,
notwithstanding our request, DOD did not identify these regulations
until after it received our draft report.  Therefore, we were unable
to determine their appropriateness.  Our review found that some Army
personnel responsible for providing logistical support to the
Corporation were unsure of what support they should be providing and
how to arrange for reimbursement from the Corporation for such
support.  Additionally, we found inconsistent arrangements for
providing support and reimbursement. 

Our continuing concern is that Army personnel involved with providing
support to the Corporation have at their disposal adequate guidance
for their dealings with the Corporation.  Therefore, we maintain that
the Army needs to issue regulations, as required by the 1996 act,
addressing the specific type of logistical support to be provided to
the Corporation and the policies for obtaining reimbursement from the
Corporation for such support.  If, during the Army's review of
existing regulations, it finds that parts of these regulations prove
appropriate, the Army should make its personnel aware of the specific
parts that apply to the Corporation.  If existing regulations fall
short of fully addressing the logistical support to be provided to
the Corporation, we believe the Army should issue regulations to
ensure full conformance with the 1996 act. 

DOD's comments are presented in their entirety in appendix I.  DOD
also provided technical comments, which we have incorporated as
appropriate. 


   CORPORATION COMMENTS AND OUR
   EVALUATION
----------------------------------------------------------- Letter :12

In written comments on a draft of this report, the Corporation
concurred that improvements were needed and noted that based on our
findings it has already taken or is taking action to remedy the
deficiencies we identified.  For example, the Corporation stated that
it has completely revised its policies for background checks and will
soon discontinue its reliance on the Defense Security Service.  The
Corporation also stated that in the future all applications for
firearm purchases will be directed to the newly-established National
Instant Criminal Check System, with the exception of those
individuals exempted by the Brady Act who have demonstrably been
cleared by other means.  The Corporation observed that our report
makes no reference to the remedial actions taken by the Corporation. 
We have not commented on these actions because they were taken after
our review and we did not evaluate them or their impact on CMP
operations. 

The Corporation agreed that its procedures were inadequate and were
not always adhered to, although the Corporation believes that we
overstated the significance of these deficiencies.  Based on our
random sample of the Corporation's sales records for three types of
firearms, we reported deficiencies that resulted because the
Corporation did not always adhere to its own procedures.  We believe
these deficiencies were properly characterized. 

The Corporation agreed that ongoing oversight of its operations would
be beneficial.  The Corporation further stated that it has retained a
firm of independent certified public accountants to perform an annual
audit, which will encompass a review of its sales program, including
an evaluation of the Corporation's compliance with the enabling
legislation and an assessment of its internal controls.  We believe
that such oversight will help to ensure that the Corporation's
firearms sales fully comply with the law. 

In addition to its general comments, the Corporation submitted three
detailed comments.  First, the Corporation stated that we did not
accurately describe its mission.  It stated that Congress has given
the Corporation a considerably broader statutory objective. 
Accordingly, the Corporation stated that its declared mission
envisions "fostering rifle marksmanship and firearms safety and other
types of training to America's youth and other qualified citizens,
emphasizing safety, discipline and dedication to the nation, state
and community." We believe that our report accurately describes the
functions of the CMP as set out in section 1612(a) of the 1996 act. 
We have, however, added in our report a reference to section 1612(b)
of the act, which discusses the youth-related priorities the
Corporation is statutorily required to consider in carrying out its
mission. 

Second, the Corporation stated that our findings regarding the
Corporation's failures to adhere to its procedures are overstated and
no longer applicable to CMP operations.  Our randomly selected sample
of Corporation sales records for three types of firearms sold to
individuals showed that the Corporation sold firearms without
adhering to its procedures designed to ensure that purchasers had not
been convicted of felonies, were U.S.  citizens, and were members of
a CMP-affiliated club.  We continue to believe that the results of
our three samples were properly characterized.  Regarding the
Corporation's recent procedural changes, we commend the Corporation
for its willingness to respond to our findings immediately. 

Finally, the Corporation stated that we greatly exaggerated the value
of federal support provided to the Corporation by using the Army
Master Data File values to determine the value of the rifles,
ammunition, and parts that were transferred or were being held by the
Army for potential transfer to the Corporation.  More specifically,
the Corporation stated that the rifles, ammunition, and parts
provided by the Army were obsolete, militarily worthless, and would
be reduced to scrap at further cost to the Army.  We believe that the
Army Master Data File values are valid for determining the value of
the items transferred or being held for potential transfer to the
Corporation.  Additionally, we noted in our draft report that,
according to Army officials, providing these items to the Corporation
actually resulted in a cost savings to the Army because the Army's
alternatives were either to incur costs to continue storing the items
or to incur costs to demilitarize them. 

The Corporation's comments are reprinted in their entirety in
appendix II.  The Corporation also provided technical comments, which
were incorporated as appropriate. 


   SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :13

To evaluate whether the CMP's transition from the Army to the private
Corporation was conducted in accordance with the Corporation for the
Promotion of Rifle Practice and Firearms Safety Act, we identified
the transition requirements stipulated in that act.  We also
interviewed Army and Corporation officials and examined their records
to compare transition actions with the requirements of the act. 

To determine the statutory requirements regarding sales of firearms,
we reviewed the act and other applicable firearms statutes.  We also
interviewed Bureau of Alcohol, Tobacco, and Firearms officials to
discuss these statutes. 

To assess the Corporation's compliance with the 1996 act in regard to
firearms sales, we randomly sampled firearms sales of three of the
four types of firearms sold by the Corporation to individuals--M1
Garands, M1Ds, and .22 caliber rifles.  Because of the small number
of such sales, we did not sample any of the 39 M1903A3s sold.  For
the M1 Garand, the sampling error is plus or minus 8 percent or less
with a 95-percent confidence level.  The sample was taken from a
universe of approximately 6,400 applications approved for firearm
sales between July 1997 and August 1998.  We excluded from our
universe applications processed from October 1, 1996, through June
30, 1997, to (1) minimize the possibility that the Army processed
parts of some applications and (2) provide the Corporation with time
to standardize its procedures after taking over the program.  We
stopped sampling M1D and .22 caliber sales records when the
Corporation official who approved the applications confirmed that the
application procedures had not been strictly followed; thus, we did
not calculate sampling errors for the M1D and .22 caliber sales. 

To determine the type and number of firearms the Corporation sold to
its affiliated clubs and to individuals, we interviewed Corporation
officials and obtained Corporation records of sales.  To determine
the type and number of firearms the Corporation had on loan, we
interviewed Corporation officials. 

We did not review the sales of firearms to Corporation-affiliated
clubs because many of the clubs had been established when the Army
ran the CMP.  In addition, some of the data needed to determine
whether procedures had been followed either were not maintained by
the Army or were indecipherable in the microfiche files provided to
the Corporation by the Army. 

We were unable to review the information resulting from DSS
background investigations, which the Corporation factored into its
decisions to approve applicants for firearms purchases.  As required
by DSS, the results of each investigation were destroyed once the
Corporation made its decision. 

To determine viable alternatives for providing oversight of
Corporation firearms sales, we interviewed officials from the
Corporation and the Army.  We also discussed this issue with the
Bureau of Alcohol, Tobacco and Firearms. 

To identify the value of federal assets transferred to the
Corporation at the time of transition, we reviewed an Army report on
the assets held by the CMP before the program's transition and the
supporting workpapers for that report.  We also reviewed the Army's
files of the transfer.\8

To determine the continuing cost of the program to the federal
government, we interviewed officials of the Army, Defense Logistics
Agency, Defense Security Service, and the Corporation.  We also
examined documents they provided related to unreimbursed support for
the Corporation and its cost. 

To determine the types and number of firearms the Army transferred to
the Corporation and has stored for potential transfer, we reviewed
the supporting workpapers to the Army report on the assets held by
the CMP before the program's transition, Army records of transfers,
and Army and Defense Logistics Agency inventory records.  We used
Army Master Data File values to determine the value of firearms
transferred to the Corporation. 

We conducted our review from April to December 1998 in accordance
with generally accepted government auditing standards. 


--------------------
\8 Assets of the Civilian Marksmanship Program (Army Audit Agency,
96-312, Sept.  27, 1996). 


--------------------------------------------------------- Letter :13.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from the date of this report.  At that time, we will send copies of
this report to the Chairmen of the House and Senate Committees on
Armed Services; the Secretaries of Defense and the Army; the
Directors of the Defense Logistics Agency and the Office of
Management and Budget; and the Chairman of the Board of Directors,
Corporation for the Promotion of Rifle Practice and Firearms Safety. 
We will also make copies available to others upon request. 

Please call me at (202) 512-5140 if you or your staff have any
questions concerning this report.  Other major contributors to this
report are listed in appendix III. 

Mark E.  Gebicke
Director, Military Operations
 and Capabilities Issues




(See figure in printed edition.)APPENDIX I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter 




(See figure in printed edition.)APPENDIX II
COMMENTS FROM THE CORPORATION FOR
THE PROMOTION OF RIFLE PRACTICE
AND FIREARMS SAFETY
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

Carol R.  Schuster
Derek B.  Stewart
Jack E.  Edwards

OFFICE OF THE GENERAL COUNSEL,
WASHINGTON, D.C. 

Richard P.  Burkard
Maureen A.  Murphy


*** End of document. ***