"We got walloped," a spokesman for the University of California, which manages Los Alamos National Laboratory, said Friday.
In a harshly worded review that described severe security weaknesses at the nuclear weapons lab — first created as a top-secret World War II project to develop the atomic bomb — the Energy Department concluded 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 UC for running Los Alamos. 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 said in a statement.
The NNSA is a branch of the Energy Department that oversees the nation's nuclear labs.
UC officials 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.
"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 and a laser accident involving an intern, 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.