Federal officials say they have begun a review of a carbon storage project based at the University of Regina.

The probe by the federal Western Economic Diversification Department was launched last month after a series of CBC News reports that revealed concerns about the International Performance Assessment Centre for Geologic Storage of CO2, also known as IPAC-CO2.

Federal officials told CBC News this week they want to know more about how federal dollars were spent at IPAC. Western Economic Diversification committed $4 million to IPAC.

"[The Western Economic Diversification Department] has relayed its concerns to IPAC and the University of Regina and is currently engaged in a review of the files," Rhonda Shymko, an official with the federal government, told CBC News in an email.

CBC has also learned that one of the issues under examination is how a $600,000 computer, paid for with taxpayer dollars, wound up in private hands until officials pressed for clarification on the ownership of the equipment.

"It did show up on the university's books as being one of their assets, but we had no access to it," Carmen Dybwad, the current head of IPAC, told CBC News.

Dybwad was especially concerned because federal funding explicitly required IPAC to maintain ownership of the machine.

CBC News obtained a copy of the funding agreement, which outlined that point.

"The Recipient [IPAC] shall not dispose of, or relinquish control over, any asset utilized in the Project," the agreement said.

Shortly after Dybwad became head of the project, she identified the computer ownership issue along with other concerns associated with the previous management of IPAC by employees of the University of Regina.

It turned out that the employees dealt with a private company, called Climate Ventures, Inc. [CVI], which insisted it had exclusive ownership of the computer. CVI was relying on an understanding reached with Malcolm Wilson, who ran IPAC for the University of Regina.

Wilson told CBC News that he made that arrangement so CVI could sell access to the computer.

"There was a potential to selling that use elsewhere and earning income from it," Wilson said. "And certainly CVI had offered to take on that role."

Eventually, Dybwad was able to sort out the ownership issue and secure the computer as a public asset.

With files from CBC's Geoff Leo