Thousands of dollars paid to the City of Fairfax for automobile and dog licenses and other fees were never credited to the city's accounts during part of the administration of former city treasurer Frances L. Cox, witnesses said yesterday in the second day of her embezzlement trial.

Witnesses also said many taxpayers who paid their real estate taxes were billed for delinquency fees because their checks became entangled in an alleged embezzlement scheme by Cox to funnel city funds into her personal bank account.

Cox, 56, has pleaded innocent to an indictment charging her with embezzling an unspecified amount of money over a 30-month period. If she is found guilty by the 12-person jury in Fairfax Circuit Court, Cox could receive a jail sentence of up to 20 years and a fine of up to $1,000.

Prosecutors have alleged that the "very unsophisticated, very simple" embezzlement scheme involved covering the cash thefts with checks from other treasury accounts that were deposited into the treasury's general fund. Prosecutors said Cox funneled at least $100,000 in city funds into her personal bank account in 1981.

City officials have declined, pending completion of the trial, to discuss how many people's payments may have been affected by the alleged scheme.

Acting City Treasurer John Coughlan said he discovered his own real estate tax payment mired in the alleged scandal shortly after investigators began sifting out discrepancies in city accounts.

"I had never been given credit for the tax payment," Coughlan said in testimony. "Delinquency notices sent out June 8 six months after the payment have me owing this amount plus a 10 percent penalty."

Coughlan also testified that an investigation of city accounts showed that cash paid over the counter for dog tags, auto licenses, bus fare cards and other fees on almost every Saturday in 1981 were never recorded in city treasury reports.

Deputy Fairfax Commonwealth's Attorney Steven Merril alleged earlier in the trial that Cox pocketed most of that cash. "She simply took most of the cash that came across the the counter on Saturdays in Fairfax City," Merril told the court in opening arguments Monday.

Coughlan said he first noticed irregularities in Cox's accounting when he compared cash collections during the first few months of his tenure in office to cash deposits made under Cox in 1981.

"The cash portion of deposits in 1981 tended to be in very small amounts," Coughlan said. "They were for amounts like 93 cents, 12 cents -- there isn't anything we sell that could possibly be 12 cents."

Prosectors demonstrated to the jury how they said Cox substituted $366 in cash with two real estate tax checks and one check from the county circuit court clerk's office on one deposit made in October 1981. Prosecutors charged that Cox similarly falsified deposits at least 215 times days during the 30 months covered by the investigation.

Yesterday's arguments were interrupted frequently by arguments between Merril and Cox's attorney John H. Rust Jr., prompting several admonitions from Judge Barbara Keenan.

She also reprimanded Rust for his frequent request for private conferences at the bench with the judge out of earshot of the jury. At one point she criticized Rust's attempt to attack the procedures Coughlan now uses as acting city treasurer.

Coughlan was appointed acting city treasurer early this year after newly elected treasurer Raymond Birch quit the job saying he had found records in complete disarray and undeposited checks and cash strewn about the office.

Cox served as city treasurer 27 years before she was defeated last fall.

The trial continues today.