ALT EXCURSION UNDETECTED BY SF340 CREW FOR 1700 FT AND APPARENTLY NEVER NOTICED BY ARTCC.

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WHILE CRUISING AT FL180 ZAU GAVE US A DSCNT AT PLT'S DISCRETION TO 12000 FT. I WAS THE PF AND COMMENCED THE DSCNT. I THEN REALIZED WE WERE STILL 105 DME FROM THE WAUSAU VOR AND DECIDED TO DELAY THE DSCNT. BY THIS TIME THE ACFT HAD DSNDED TO 17700 FT. I PRESSED THE 'ALT' BUTTON ON THE MODE SELECT PANEL (MSP) OF THE AUTOPLT. THIS MODE OF THE AUTOPLT CAPTURES THE ALT OF THE ACFT AT THE TIME THE BUTTON IS PUSHED. I DECIDED TO PUT THE AUTOPLT INTO A 200 FPM CLB TO GET US BACK TO FL180. I DID NOT REALIZE THAT 12000 FT HAD ALREADY BEEN PUT INTO THE ALT PRE-SELECTOR. I HAD EXPECTED THE ACFT TO START A 200 FPM CLB AND CAPTURE 18000 FT BUT BECAUSE 12000 FT WAS IN THE PRE-SELECT; THE AUTOPLT NEVER CAPTURED FL180 AND CONTINUED TO CLB TO FL197 BEFORE THE FO NOTICED THE DEV AND WE STARTED DOWN TO 12000 FT. THE CTLR NEVER HAD US VERIFY OUR ALT NOR DID HE MENTION THE DEV. DURING THE CLB WE WERE DISTRACTED FROM FLYING DUE TO PAPERWORK THAT WE BOTH WERE COMPLETING. IMPROPER MONITORING OF THE AUTOPLT AND THE PAPERWORK DISTR LED TO THIS DEV. HAVING 1 PLT MONITOR THE ACFT WILL PREVENT A RECURRENCE OF THIS INCIDENT.