The D.C. Department of Human Resources has halted public assistance to 133 federal and local government employes following allegations of more than 700 cases of fraudulent or erroneous payments. DHR director Albert P. Russo announced yesterday.

Russo also told a news conference that assistance levels have been lowered for 97 persons while 15 others had hetir payments increased as a result of departmental investigations.

The investigations resulted from a disclosure by the U.S. Department of Health. Education and Welfare last year that 737 U.S. and D.C. employes were receiving welfare payments too high for their income level. Some, the department stated, should not have been receiving any public assistance at all.

Russo said it would be up to the courts to decide whether any of those receiving these payments will have to repay the government. In most cases, he said, the incorrect payments were made because DHR did not know that the recipients were full-time government employes.

Under current welfare regulations, female heads of households are entitled to public assistance, but the levels are keyed to their salaries. Working welfare mothers are required to inform DHR of any raises they receive in their salaries.

Russo expressed concern that the "erro" rate" in D.C. payments of Aid to Families with Dependent Children "continues to be unconscionably high" largely because the local administration lacked adequate personnel to carry out regular case reviews.

Excessive errors in AFDC payments cost the federal and local governments an estimated $8 million a year, Russo said.

Russo also announced that in response to a review by the U.S. General Accounting Office, DHR had launched several new procedures to improve management of the city's supplemental food program to pregnant women and mothers of young children.

Most of the procedures concerned improving storage and distribution of food, Russo said.

The GAO, in a survey of the supplemental food program, said that in surveying program distribution clinics it discovered a shortage of 5.491 food coupon books worth $1.2 million.

Russo and Doris Thornton, director of the supplemental food program, claimed that the survey was not a complete one. Russo also said that the coupons not be used fraudulently "to the same extent" that could food stamps.