Two computer disks that supposedly disappeared last summer, prompting a virtual shutdown of the Los Alamos National Laboratory (search), in fact never existed, according to report released Friday.

In a harshly worded review that described severe security weaknesses at the nuclear lab, the U.S. Energy Department (search) concluded that bar codes were recorded for the disks but the disks themselves were never created. A separate FBI investigation supported that finding, according to the report.

"The weaknesses revealed by this incident are severe and must be corrected," according to the report.

As punishment for the problems, the Energy Department slashed by two-thirds the management fee it paid to the University of California for running the Los Alamos National Laboratory. Out of a possible $8.7 million, UC will get only $2.9 million; it is the largest fee reduction ever imposed on a national laboratory.

"Although multiple investigations have confirmed that the `missing' disks never existed, the major weakness in controlling classified material revealed by this incident are absolutely unacceptable and the University of California must be held accountable for them," National Nuclear Security Agency Administrator Linton Brooks (search) said in a statement.

UC officials on Friday accepted responsibility for the problems but pointed to the months of work they and lab officials have done reviewing Los Alamos' safety and security procedures since the initial shutdown.

"We got walloped. Unfortunately, we deserve this," UC spokesman Chris Harrington said. "But what we have done is correct the problems and put the right system in place so that we don't have to take this type of hit again."

In the wake of the supposed disk disappearance, four Los Alamos workers were fired and one resigned. The problems also drew criticism from Congress and senior officials at the Energy Department.

About 12,000 workers were idled during the July shutdown.