An audit of records in one District of Columbia agency has disclosed gaps in the city's payroll system that could lead to such abuses as checks being written to nonexistent employes, D.C. Auditor Matthew S. Watson has told the City Council.

Stressing that his audit team "found no evidence of improprieties," Watson recommended tighter controls over issuance and distribution of paychecks and periodic verification of information on which checks are based.

Colin F. S. Waters, assistant city administrator who oversees payroll operations, said that some key recommendations from Watson already have been adopted and that others will be included in a new financial management system the city will put into operation next October.

Watson said the audit was conducted in December and covered the payroll of the D.C. Department of Labor, which was used as an example of citywide practices.

Because names of former employes are not purged promptly from the current payroll lists as they resign or retire, the Labor Department rolls maintained in the city's central payroll office contained 900 names although only 700 employes actually were working.

"The time and attendance form printed for each of these former employes every two weeks is capable of causing a paycheck to be issued if hours of work are filled in," Watson said.

Watson also said that payroll data for 610 employees was checked and that errors were found in 18 percent of the records, including wrong addresses, names or initials and social security numbers.

As a safeguard, Watson also recommended that the work of payroll clerks in preparing and transmitting vouchers and distributing checks be more closely supervised.

Waters said the payroll office already has stopped routine printing of payroll forms for those who receive no pay during the pay period.