On January 13, 2012, the NRC issued a Notice of Violation and Proposed Imposition of a Civil Penalty in the amount of $14,000 to S&R Engineering (S&R) for a Severity Level (SL) III problem and two SL III violations. The SL III problem involved two violations: 1) S&R’s failure to comply with or respond to an NRC Order, as required by 10 CFR 2.202(b); and 2) S&R provided information to the NRC that was not complete and accurate in all material respects as required by 10 CFR 30.9(a). Specifically, as of January 13, 2012, S&R has not submitted an answer to the order (which was required by November 28, 2009), has not paid the license fee, and has not disposed of or transferred its licensed nuclear material to an authorized recipient. On August 3, 2010, the S&R president informed the NRC that S&R had transferred its portable moisture density gauge containing radioactive sources to another NRC licensee when S&R still possessed the gauge. The two additional SL III violations involved S&R’s failure to afford the NRC an opportunity to inspect materials, activities, and records under the regulations as required by 10 CFR 19.14(a) and S&R’s failure to use a minimum of two independent controls that form tangible barriers to secure portable gauge from unauthorized removal, when the portable gauge was not under S&R’s direct control and constant surveillance as required by 10 CFR 30.34(i). Specifically, on August 3, 2010, S&R provided the NRC inaccurate information about the location of its licensed material, thereby preventing inspection of S&R’s licensed activities and the gauge has been stored inside of its shipping case, which was located in an unlocked closet of the locked S&R office, providing only one barrier.