The top administrative officer of a pathology division at George Washington University Medical Center has been arrested and charged with embezzlement of an estimated $4,000 in hospital funds.

The arrest of William Morse Ragland, 44, of 1401 N St. NW on Thursday has started an intensive federal and local investigation of his handling of the division's $4 million yearly budget, police said.

The case was turned over to police by hospital officials, who had begun checking out allegations about Ragland's spending habits, investigators said.

The initial charges filed by police against Ragland involve allegations that he would double-bill the university for trips he had taken, would bill the university for trips in other names, wouldhave payroll checks issued in the names of persons who did not work there, and would have insurance payments issued to him in his name instead of the hospital's name, the investigators reported.

Ragland, who earned approximately $15,000 a year as administrative manager of the pathology department's division of laboratory medicine, has been placed on administrative leave with pay pending resolution of the charges, a hospital official said.

"We're very, very distressed to hear about this because in all other respects, he's been an outstanding individual. He's really made a contribution here," said Dr. Dennis O'Leary, dean for clinical affairs at the medical center.

According to an affidavit in support of a search warrant for Ragland's office at the hospital, Ragland had authority to approve payment vouchers, order supplies and handle outside billing for the pathology department division.

The affidavit signed by Police Set. William Prudden said Group Health Association had issued two checks totalling approximately $1,500 payable to Ragland at the hospital after receiving a bill signed by him. Police said the checks had been endorsed by Ragland and deposited into his personal account at American Security and Truct Co.

Next, police said, a check of hospital records by internal security officials there indicated that Ragland's travel expenses for seven of the 10 business trips he took over a one-year period had been prepaid by the school directly to a travel agency, but that Ragland had again billed the school after the trips.

In addition, police claimed that Ragland had approved travel payments for 10 persons who are not employed by the hospital.

In other instances, police said, Ragland had approved payments of about $180 for a former hospital employee and $1,200 for supposedly technical work done by a hospital employee described in the police affidavit as a person "used solely to run errands."

Ragland was arrested around 1:20 p.m. Thursday, and a second search warrant later was issued for his apartment from which more than $1,000 in camera equipment was seized. The camera equipment reportedly was purchased with hospital funds, according to the police.

Ragland has been released on personal bond. Assistant U.S. Attorney William Block of the fraud division eaid the investigation into the alleged embezzlement scheme is continuing.