They first found radioactive contamination in chocolate cake baked in the Tucson public schools' central kitchen, which provides hot lunches daily for thousands of children.

Then they found radioactivity in the St. Ambrose Church swimming pool, where children's teams regularly practice and compete.

And finally they found radioactivity in the urine samples of six persons, including a 6-year old, Tony Bruckmeier, who had the highest radiation levels.

But by Friday night, when the Arizone Atomic Energy Commission suspended the operating license of the American Atomics Corp. over the source of the radioactivity - the firm's tritium emissions - the people of Arizona had found much more.

They got, as other nuclear incidents have provided, an intimate look into the industrial use and handling of radioactive material as well as the willingness and ability of regulatory agencies to police their industry.

What was revealed here was the clumsiness of a state agency whose decisions have impact on the neighbors of American Atomics as well as the $10-million-a-year company and its 200 employes with an annual payroll of $2.5 million.

And today, as the state began hearings on a permanent closing of American Atomics' tritium operations, Rep. Morris K. Udall (D-Ariz.), chairman of the House Interior Committee, announced an investigation into federal practices that allow Arizona and 24 other states to enforce U.S. regulations governing radioactive material.

Throughout it all, including today's hearing on 13 alleged nuclear violations by American Atomics, the company has maintained that it has not breached its state operating licenses and that the levels of tritium found surrounding the plant, measured in infinitesimal quantities, pose no threat.

The company buys tritium from the federal government and inserts it in thin glass slivers that glow without any electrical charge. They are used primarily in digital watches. The company also has a role in making neon signs.

American Atomics has been using tritium here at its South Plumer Street Plant, which has no sign, for four years, with neighbors apparently unaware of the presence of the radioactive substance or its discharge into their air, water and food.

State investigators said the tritium operation has been carried on with insufficient monitoring, poor accounting of its disposal and excessive discharges into the air.

They concluded that the overall operation of the plant, located next to a residential community, "results in the introduction of unnecessary and unwarranted radioactive material into the environment, [raising] substantial questions of threat to the public health and safety."

But the controversy, which began quietly a year ago, also has raised questions about the commission:

An August 1978 inspection of the plant, carried out in the wake of the contamination of an employe, found signigicant amounts of tritium unaccounted for, but the report was never acted on by the commission's executive director until immediately before his resignation early this year.

For much of the time the report was not acted on, an American Atomics vice president, Harry H. Dooley, was on the board that governs the state atomic energy agency. The Arizona Daily Star has reported that Dooley accompanied state AEC staff investigators on the August inspection of his own plant.

The commission, after urgings by Gov. Bruce Babbitt and other elected officials, declared an emergency Friday night and voted to suspend American Atomichs tritium operations immediately.

The action came just hours before today's hearing on permanent action against the company. Commission Chairman W. R. Willis declined to explain why the commission acted suddently or what "emergency" suddenly existed more than two weeks after samples of chocolate cake had been found to be contaminated by tritium.

One of the nine commissioners is Gordon Dunning, a controversial former employe of the qqu.s. Atomic Energy Commission, who is alleged to have helped hide findings in 1953 that fallout from U.S. atomic bomb tests in Nevada killed nearby sheep.

A spokesman for American Atomics said the company will question the accuracy of tests that found excessive levels of tritium in food and elsewhere. He added that other samples were well within federal limits and posed no threat to anyone.

But it may take years for tritium-related adverse health effects, if there are any, to appear. Meanwhile, the presence of the radioactive substance, a form of hydrogen, has disrupted the lives of residents near the plant.

With the Tucson schools' kitchen closed, children have had to carry sack lunches to school. St. Ambrose School is closed and its swimming team must go elsewhere to practice.

Some residents have quit cooking on backyard grills or have drained their swimming pools, and some have quit bringing grandchildren to visit grandparents who live in the shadow of American Atomics.

"I was surprised they allowed this thing in a residential area," said Tony Bruckmeier's mother, Mary, who has nine other children. The family has lived adjacent to American Atomics for 3 1/2 years.

"People was very worried. It isn't fair that a company keeps going and the kids have to suffer," she said.

But Bruckmeier has put her faith elsewhere that her children and her granddaughter, who visits daily, will not be harmed by the radioactivity.

She laments the remote possibility of children dying as a result of exposure to radioactivity. "But if that's what God wants," said Mary Bruck-meier, "that's what's to be." CAPTION: Picture, Tony Bruckmeier in his back yard, which adjoins the American Atomics plant. By Bill Curry - The Washington Post