Three police officers and two staff have "cases to answer" after the shootings of a mother and daughter at a puppy farm in 2014, inquiries found.
Two Surrey Police staff were rebuked for returning shotguns to John Lowe, who later murdered Christine and Lucy Lee.
Three officers were criticised over the arrest of Ms Lee's other daughter Stacy Banner after the deaths, said the IPCC.
Surrey Police has sacked a staff member and is considering the other findings.
A separate investigation about complaints made by Mrs Banner is looking at her contact with family liaison officers and her subsequent arrest after her mother and sister were shot at Lowe's Farnham home.
An IPCC investigator's opinion was that a detective constable and a detective sergeant had cases to answer for misconduct, and a detective inspector had a case to answer for gross misconduct, which related to authorisation of Mrs Banner's continued detention and her further arrest.
Mrs Banner said: "These reports show that I was right all along about my concerns about Surrey police's failings.
"It is devastating to see your worst fears confirmed in black and white about how those entrusted with the public safety can abuse and neglect their powers."
Mrs Banner said without police failings her mother and sister would be alive.
"To then find myself detained overnight contrary to the law, as the report confirms, in the same police station - possibly the same cell - where my mum and sister's killer had been held, beggars belief," she said.
Surrey Police said a decision would be made on what action to follow in due course.
Risks 'not checked'
The Independent Police Complaints Commission (IPCC) associate commissioner Tom Milsom said an investigation painted "a deeply concerning portrait" of Surrey's firearms licensing.
He said: "We found a unit which lacked the necessary training and processes to manage such a serious responsibility, staffed by individuals who were failing to undertake their duties with rigour and due consideration."
He said investigators looked at the actions of Stanton Royle, firearms licensing supervisor, and John Crabb, a firearms licensing inquiry officer, and found they did not:
- Check police intelligence on Mr Lowe
- Highlight the risks he posed from a previous threat-to-kill investigation
- Look at whether he was a danger to the public
- Make sufficient inquiries into an ongoing investigation
- Consider historical information on him
After Surrey Police agreed with the findings, a gross misconduct case was proven against Mr Crabb, who was dismissed without notice. Mr Royle retired before a hearing took place, the IPCC said.
On the firearms licence, the IPCC said Surrey Police had accepted recommendations including the need to ensure structured training for licensing officers, liaison between the licensing team and officers and appropriate consideration of medical information.
Mrs Banner, who has criticised the force's decision to return the firearms, said she now planned to sue the force.
Her solicitor, Sarah Ricca, said: "The IPCC recommendations in this shocking case include that the licensing team should liaise with officers investigating allegations against firearms license holders.
"In other words, the IPCC is recommending that licensing team staff do their job."
Surrey Police said the force seized Lowe's licence and a number of shotguns in 2013.
Its decision to return the weapons was criticised in two independent reports by Hampshire Constabulary and North Yorkshire Police, which prompted the IPCC investigation and a comprehensive review of firearms licensing in Surrey.
The force said the Crown Prosecution Service decided not to bring criminal charges against the firearms licensing officers.
Deputy Chief Constable Gavin Stevens said: "The shotguns should never have been returned to John Lowe, and it was important that we responded very quickly to correct the failings.
"The decision to return the guns was absolutely the wrong decision."
He said the Surrey Police had reviewed all cases over the previous three years where weapons had been returned to people.
Mr Stevens said Surrey Police had apologised to the women's families.