On November 27, 2007, a Notice of Violation and Exercise of Discretion for Proposed Imposition of Civil Penalty in the amount of $65,000 was issued for a Severity Level III problem consisting of four violations involving the licensee's failure to comply with 10 CFR 74.19 between 1959 and 2007. In summary, the licensee failed to (a) keep complete records showing the inventory (including location and unique identity), transfer, and disposal of all special nuclear material (SNM) in its possession; (b) establish, maintain, and follow written MC&A procedures that were sufficient to enable the licensee to account for SNM in its possession; and (c) conduct a physical inventory of all SNM in its possession at intervals not to exceed 12 months. This resulted in the failure to account for two fuel pellets and a number of incore detectors containing SNM.