During its first year of operation, the Diversion Project, run by the Department of Human Resources, apparently has been successful at keeping non-criminal youth out of the criminal justice system. Because of funding problems, however, the federally supported program may not succeed staying alive beyond this fall.

Staff members said 169 of 170 clients have either returned home or have been diverted from entering the criminal justice system by joining Job Corps programs.But the city council said the program has not proven its cost effectiveness or worth over similar privately run programs. It is these factors, among others, that should determine if the program will be funded by the city in September after its federal funds run out, the council said.

Recenty, the council rejected a request from Mayor Walter E. Washington that $300,000 be placed in DHR's 1979 budget to continue the program. Instead they opted to place the money in the social services division of the Superior Court, giving this agency the power to contract for services from private and government-run youth diversion programs of their choice.

DHR director Albert Russo said that council members had not advised him of their action before it was taken.

"Not that they have to," he said. "I'm well aware of the powers of the council. That they, like the Lord, can accept or reject (at will.)"

Russon said he didn't understand the reasoning behind the council action and in his opinion the decision "raises some profoundly serious questions in regard to the separation of powers between the council and the courts."

"Even if we do put our pride in our pocket and submit our request to the court, I'm not sure if that entire amount will be returned to us," he said.

The council's action places the DHR program in the unlikely position of having to compete with two similar, privately run, programs in the city: The Youth Arbitration Center, administered by the Urban League, and the Southeast Settlement House Youth Development Program, run by private operator James Bellamy, who is president of a local child advocacy group known as the D.C. Coalition for Youth.

Within recent years, members and associates of the coalition have charged that privately operated youth programs in the District have been financially starved-out or forced to seek out-of-state clients because DHR would not give them service contracts.

DHR staff members said their program now faces the same possibility of closing if they do not receive contracts. Without subsequent funding, Russo said the Diversion Project "is going to be killed" in September after its federal and city government grants end. And 15 people, now funded through federal grants, will lose their jobs. The rest of the program's 22 employes, who are DHR workers, will reassigned to other DHR programs.

While federal funding has been lucrative, more than $220,000, it has not always been timely, said Neil Hoffman, director of the Diversion Project. Chronically late federal grant payments have resulted in late pay checks, staff shortages, and other problems, he said.

The city council amendment was drafted by councilmembers David A. Clarke and Polly Shackleton, who directs the Committee on Human Resouces and Aging. In a memorandum to the council, Clarke and Shackleton presented a threefold rationale for their action.

They said giving DHR the funds "implies a council decision that DHR operates the only fundable diversion project in the city." The memo stated that no evaluation of the cost effectiveness or impact "on the needs of potential youth offenders" had been done on the Diversion Project.

The memo did not state whether such evaluations have been completed on the other two youth programs. However the second reason for placing the money in the courts was that it "affords all existing youth diversion program operators - both from the community and DHR - to bid openly and fairly for funds to carry on their programs . . . ."

Third, the memo said, because the social services division of Superior Court screens all potential non-criminal youth cases and recommends which youth should enter the court process, the court is the "logical choice for administering the $300,000 for provision of youth diversion programs."