Police internal affairs officers are investigating the loss of several thousand dollars in traffic fines that had been handled by policemen at the District of Columbia cell block, according to informed sources.

The four-month-old inquiry had led to lengthy interviews with a number of officers, and internal affairs is now passing information to a grand jury, which is looking into the matter.

The missing money comes from fines paid to police officers every day by citizens who have had iron "boots" placed on their cars, or who have been arrested for failing to pay past fines fines for traffic violations.

Most of the money is taken in after regular Superior Court hours. The central cell block is open around the block, while declining to comment a 24-hour day, according to informed sources.

Police officials in charge of the cell block, while declining 4 to comment publicly on the investigation, cautioned against attributing criminal intend to any of the 18 officers assigned to the cell block.

"It would be unfair to point the finger at anyone right now; we've got some very good men down there," one official said.

Money-handling procedures were admittedly loose department officials say, but have been tightened since the investigation began last February.

Until that time, police officers collected money in unsecured zip bags at the cell block and eventually turned it over to a liasion officer who took it to Superior Court and left without a receipt, according to informed sources.

Police officers at that time punched the ticket number into the cash register as they collected the fines, but no one checked to see if all the ticket numbers were put on the letter of transmittal sent to Superior Court.

"Now everything is logged and signed off every time that money is moved," one department official said. The cashier is supposed to put the money immediately into a safe, and at the end of his shift count it with the shift commander, who checks it against the number of tickets collected.

The shift commanders now turn the money over to administrative lieutenants, who count it again, log it and hold it in their safe before turning it over to the liaison officer, who now collects a receipt from Superior Court.

Officials in the department's identification and records division, which has jurisdiction over the cell block, have for years argued that their men should not have to collect fines.

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Assistant police chief John Hughes has proposed that all 18 men, in the cell block be transferred, but he and other department officials said yesterday that that proposals is not connected to the investigation.

"I believe in rotating everyone in the department," Hughes said yesterday.

Hughes said he believes in rotating all officers to keep them at maximum efficiency.