City officials want to set the record straight: Reports of billions of gallons of water gone missing have been greatly exaggerated, they say.

In December, the city released an audit saying that the Water Utilities Department could not account for 17 percent of the water -- about 26.3 billion gallons -- produced during the last fiscal year. Residents questioned who was minding the store at City Hall, and City Council members deemed the department's failings "an absolute embarrassment".

Since then, the water department has taken several steps to more accurately report water consumption and to track unbilled uses such as fighting fires and sweeping streets. As a result, the city now estimates that only 9.6 percent of water produced cannot be accounted for. The American Water Works Association recommends that less than 10 percent of water produced by a city should be unaccounted for.

The internal audit has been a matter of dispute since it was published. Water utilities officials and auditors have butted heads during the last several months.

Water department managers have contested the report, saying that the auditor ignored crucial information showing that the 17 percent figure was overblown. The auditor has stood behind his findings. Both departments have taken plenty of heat for the audit.

"I have heard about this non-stop since the day it was published," said Bob Johnson, the interim director of the Water Utilities Department. "People ask, 'Did you find that water yet?' It's disconcerting."

Although Mr. Johnson and City Auditor Thomas M. Taylor don't agree on the audit's original findings, both concur that the water department has improved its efforts to track consumption.

"They're now accounting for more of the water," Mr. Taylor said. "I think they're getting better."

Mr. Taylor said his staff has not attempted to verify whether 9.6 percent is a fair representation of unaccounted-for water, but he has seen progress. "I agree the number is below 17 percent now, but I don't know how much," he said.

Mr. Johnson maintains that 17 percent was never accurate.

Before the audit, the city had not tracked how unbilled water was used. But Mr. Johnson said that while the audit was under way, his department provided estimates of how much water was consumed by unbilled uses such as main breaks, fighting fires and sweeping streets. The auditor ignored the estimates and said unbilled water was unaccounted for, Mr. Johnson said.

He acknowledged that the department had never tracked or estimated how many millions or billions of gallons were consumed by those uses before the auditor requested such information. "It's something that probably wasn't on the top of anybody's priority list," Mr. Johnson said.

But the department has been refining its estimates of unbilled water and has made other improvements to its consumption reports, he said. "We want our customers to know that we're well managed," Mr. Johnson said. "And we're still pursuing every attempt to lower than number even further."

Council members said the audit and subsequent reports of "lost water" had been a black eye for the city, but they're hopeful that customers will appreciate that more water has now been accounted for. "I want to assure the citizens that we're not wasting water," council member Veletta Forsythe Lill said.

Council member Alan Walne said the department should have done a better job tracking water before the audit. "This was one of the areas that they did not pay close enough attention to, and they should have," he said. But Mr. Walne said he is comfortable with the new procedures that have been put in place.

Still, some on the council remain doubtful. Mitchell Rasansky said he is unconvinced that significant progress has been made. Water officials "didn't give me answers that satisfied me," he said. "I'm sticking with what our auditor told us."