A former employee of the Conshohocken Sewer Authority is free on bail after being charged with stealing more than $167,000 of authority funds over a two-year period.

Tracy Michele Connolly, 48, a former executive secretary at the authority, was arraigned yesterday on more than 700 felony counts of theft-related offenses. She was released on $50,000 unsecured bail. Her preliminary hearing is set for Dec. 15.

"We look forward to the trial," said Connolly's attorney, Thomas Egan of Norristown. "She is not guilty of any theft."

Conshohocken Police Detective Shane B. Murray said a lengthy paper trail says otherwise.

He said the probe started in July after an audit of the authority's books uncovered questionable expenses. Over several months, investigators found that Connolly, who also goes by the last names Pasquarello and Arrivello, appeared to have concocted an elaborate scheme to defraud the authority.

According to an affidavit from police, she forged authority board members' names on checks and money orders, made payments to fake companies that she had set up, and set up an unauthorized wire transfer account.

The alleged thefts took place between August 2006 and July 11, when she was fired.

The money went for her rent, car payments and repairs on a 1998 Mercury Sable, a week-long rental of an Ocean City, N.J., beach house for her son and his friends, and personal expenses such as nail care, Murray said. The losses came to $167,642.69.

Assistant District Attorney Kevin R. Steele said that if convicted, Connolly could receive from 31/2 to seven years on each count.

"She has a lot of exposure over her based on the seriousness of the offenses," he said. "And the amount - more than $150,000 - also increases the guidelines."

A board member who did not wish to be identified because, he said, his name is forged on some of the checks said that some, if not all, of the losses will be covered by insurance.

Contact staff writer Nancy Petersen at 610-696-4932 or npetersen@phillynews.com.