The University of California’s contract to manage Los Alamos National Laboratory runs the risk of being terminated after recent mismanagement scandals that have been brought to light in a U.S. Department of Energy report.

In its Jan. 30 report of the Los Alamos investigations, the D.O.E. found that severe weaknesses in internal management had contributed to the widespread loss or theft of computers and equipment, misuse of lab-issued credit cards, and intimidation of employees against speaking out about their concerns, including the firing of two security officials who had brought their findings to the attention of the FBI.

In early January, UC President Richard C. Atkinson announced the replacement of top management officials at Los Alamos, including the appointment of a new interim director, new auditors and new security division leaders. The university also re-hired the two security officials and appointed an oversight board to guide the new director, which includes three UC Regents, one Stanford University professor and UCSD Chancellor Robert C. Dynes.

“”If I look out around the country and ask what alternatives there are to the University of California to run these labs for the defense of the nation, I don’t see any other institution that has the intellectual horsepower and would do it for the right reasons,”” Dynes said. “”The University of California doesn’t do it for the money.””

Dynes, a physicist, has worked closely to advise UC laboratories for over 20 years, serving as vice chair of the President’s Council on the National Laboratories for the past decade.

The University of California must now wait until the end of April to find out if the D.O.E. will continue to let the New Mexican laboratory be run by the university after 60 years in its care. During these years of partnership between the university and the government, Los Alamos saw the development of the atomic bomb in its first days, and today continues to conduct sensitive research in the development of defense strategies for the nation, including major projects in the nuclear sector.

“”I’m worried about it,”” Dynes said, explaining that at this point the University of California is “”not overly secure”” about keeping its contract.

According to Dynes, it is the University of California’s sense of public responsibility that leads it to manage national laboratories for the government, but faculty and students also benefit from collaborations and internships at the laboratories. Numerous UCSD students and faculty members have spent time at Los Alamos; according to Dynes, their number is “”at least as much”” as at any other University of California.

The D.O.E. report found that in addition to the laboratory being overly lax in employee’s spending — one example was the attempted purchase of a $20,000 Mustang sports car on a lab-issued credit card — the laboratory’s management had also issued memorandums that emphasized loyalty to the laboratory “”at the possible expense of full disclosure of identified problems.”” Guidance included such lines as “”Resist the temptation to ‘spill your guts.'”” “”Handwritten notes can be especially damaging … They are not easily disavowed,”” and “”Finger-pointing will just make the program look bad.””

According to previous reports by the D.O.E., a flawed accounting system had left the university in the dark about many improper transactions made by lab employees. Only items of a cost of above $5,000 were to be reported, which, according to the two security officials, left the door open for employees to make inappropriate purchases, sometimes splitting larger sums into several smaller sums to escape detection. In addition, according to the security officials, only about 30 percent of lab equipment that was required to have bar codes actually had them, making lost items untraceable and effective audits near impossible.

Though allegations have put the figures of money lost on missing computers and other property at upwards of $2.7 million, no figures detailing the losses have yet been made public.

The problems, according to Dynes, arose in part because of a certain culture that exists at the isolated Los Alamos National Laboratory, which is located up on a mesa, hours away from Albuquerque.

“”They start believing that because they’re doing something that’s for the public good, they can break some rules,”” Dynes said. “”The University of California will now have to be much more hands-on.””

Apart from ongoing investigations into the scope of the problem and reassignments of top positions at the laboratory, some of the measures taken by the University of California include instituting new systems of checks and balances, such as the implementation of rules stating that the Los Alamos business practice and audit directors must now report directly to UC business practice and audit officials.

Whether or not the mismanagement has affected the quality of scientific research at Los Alamos has yet to be determined. According to Dynes, his role is to dig into the technical programs to make sure they do not have flaws equivalent to those in management.

“”Right now we don’t know if there are [flaws] or not,”” Dynes said. “”If there are, we want to find them so that it’s the University of California that corrects them, not an outside entity.””

According to the federal report, the laboratory accounts of missing computers and other equipment omitted specifying whether there was any sensitive information stored on these items. Laboratory officials, however, have said that there was not.

Dynes said that his role is also to make sure that the quality of the science conducted is retained, and that the laboratory continues to attract high-quality scientists.

“”These laboratories function well because they have good scientists,”” Dynes said. “”The recruitment is the wellspring for the weapons program. We can’t just do the programs the government asks for — we must do good science to make the labs attractive to good scientists.””

The Los Alamos National Laboratory employs about 7,500 UC employees. The University of California’s contract expires in 2005, but either side may terminate at any time. The D.O.E. will evaluate the University of California’s performance by April 30.