Mayor Bloomberg and a key City Council member are defending the leadership of the city’s Administration for Children’s Services after federal prosecutors announced charges against two city employees and two foster care workers, accusing them of embezzling money intended for the city’s neediest children.

U.S. attorneys said the defendants — two of them payment officials within the Administration for Children’s Services — stole hundreds of thousands of dollars by fabricating invoices and paying themselves with fake adoption subsidies. In addition, a third Children’s Services employee was arrested this morning for cashing counterfeit checks worth $2.7 million. The charges come one day after yet another defendant was sentenced to prison for adopting 11 New York children and keeping them locked up while she collected subsidies meant for them.

Federal prosecutors said lax supervision in the agency’s payment system had spawned a slew of abuses.

“These defendants were driven by greed, and they placed their own self-interests above the wellbeing of the children served by ACS,” United States Attorney Michael Garcia said when he announced the embezzlement charges yesterday. “They stole from the scarce resources available for adoptive foster families.”

City officials and child advocates stressed the need to improve the agency’s oversight practices, but they said they supported the agency’s leadership. The Administration for Children’s Services has become more effective since 2006, they said, when it was blamed for the highly publicized death of a child on its caselist.

“Ever since the Nixzmary Brown tragedy, all of us who do oversight have had to ask if the agency is being run properly,” said Councilman Bill de Blasio, who chairs the City Council committee overseeing the agency. “It has improved its operations and cleaned up its house, and a majority of the people there are doing pretty good work.”

Mayor Bloomberg expressed similar sentiments, commending agency commissioner John Mattingly but adding that “clearly we didn’t have the appropriate safeguards in place.”

Two officials within the agency’s payment services department, Lethem Duncan and Nigel Osarenkhoe, are accused of approving subsidy payments to a person at a foster care agency who never actually adopted a child. About $79,000 was paid to the co-conspirator, Stay Thompson, and then she split the money with Mr. Duncan and Mr. Osarenkhoe, according to prosecutors.

Mr. Duncan also allegedly approved more than a million dollars in payments to Philbert Gorrick, a computer services contractor who allegedly submitted fictitious invoices. And in a third case also announced today, another agency employee named Darly Estinval was accused of stealing checks made out vendors who worked with Children’s Administrative Services. A counterfeit ring then altered the checks, which were worth $2.7 million.

Commissioner Mattingly pledged to look into how the agency’s payment system can be improved. It administers about $32 million in adoption subsidies each month, as well as about $42 million each month in payments to non-profit foster care groups.

“We are appalled and extremely disappointed to discover that employees who were entrusted by ACS to do important work on behalf of vulnerable children were instead illegally manipulating the financial checks and balances in the adoption subsidy system,” Mr. Mattingly said in a statement. “We will be investigating thoroughly to discover how our internal controls and fiscal accountability systems were violated.”

He noted that “no individual children were directly hurt” in the scams, since real foster families did receive their checks.

Children were hurt in another case that concluded Tuesday, when a federal court sentenced Judith Leekin to more than 10 years in prison for embezzling $1.7 million from the state. She was accused of illegally adopting 11 children, some with mental or physical disabilities, and living lavishly off their subsidies while restraining them in a garage.

Mr. Duncan had been assigned to work with law enforcement officials who were investigating adoption subsidies in the aftermath of the Leekin case. Prosecutors eventually nabbed him, and he agreed to cooperate while discussing an embezzlement scheme with Mr. Gorrick and Mr. Thompson, leading to their arrest Tuesday night.

Mssrs. Duncan, Osarenkhoe, Thompson, and Gorrick have been charged in the Southern District of New York, and if convicted would face various maximum sentences ranging up to 75 years in prison. Ms. Estinval has been charged in the Eastern District, and faces a maximum of 30 years.