On September 13, 2007, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of $3,250 was issued for a Severity Level III problem composed of two Severity Level III violations. The first violation involved the failure of MC Squared, Inc., an Agreement State licensee (licensee), to file NRC Form 241 at least three days prior to engaging in licensed activities within NRC jurisdiction. Specifically, the licensee stored or used a portable gauge containing byproduct material (americium-241 and cesium-137) at two Indian Reservations which are areas of exclusive NRC jurisdiction regarding the use of NRC-licensed materials. The licensee did not file NRC Form 241 prior to using the material at these sites. The second violation involved the licensee's failure to use a minimum of two independent physical controls to secure a portable gauge from unauthorized removal when the gauge was not under the control and constant surveillance of the licensee. This failure may have contributed to the theft of the gauge which was reported. Specifically, the licensee stored the gauge in an unlocked trailer, located in an unrestricted area when an authorized user was not present. Although the gauge was in a locked container, the gauge had no physical control to form tangible barriers to secure the gauge from unauthorized removal, because the gauge container was not secured to the trailer, nor was access to the trailer controlled.