The Department of Human Resources 1978 annual report released last week shows that in some areas, DHR is providing social services to fewer people than three years ago, despite DHR Director Albert Russo's claim that the overall "demand for (social) services is increasing" in the city.

The report indicated that the number of people using outpatient clinics, alcoholism and mental health centers and other public services has decreased between 1976 and 1978, despite public complaints about the lack of services in these areas.

Russo said problems such as staff decreases, funding shortages and attempts to comply with court orders have hindered DHR's overall effectiveness in providing specialized care -- such as alcohol prevention programs -- to the city's poor.

He said the agency has lost more than 2,000 appropriated staff positions over the past decade. DHR officials attribute this loss to attrition, hiring freezes and failure to replace outgoing employes. The agency is also operating under the mandates of some 30 court orders advocating establishment of a wider range of innovative community and institutional services for the mentally disabled, alcoholics, juvenile offenders, the physically handicapped and others.

Despite the problems, DHR successes last year included placing 6,700 children in day care centers. Jobs were provided for 6,951 physically and mentally disabled persons aged 16 and older. A court order demanding the removal of 30 mentally retarded people from the city-run mental institution to community homes was fulfilled, and 200 beds were re-approved for use by elderly Medicaid and Medicare patients at D.C. Village.

Over the past three years, the report showed that welfare rolls have decreased gradually. Persons receiving Aid to Families with Dependent Children (AFDC) decreased from 96,889 people in 1977 to 91,768 people in 1978. However, DHR officials have attributed much of the decline to new worker efficiency methods used to improve judgment in evaluating applications. The number of persons eligible for welfare, officials said, has remained stable.

In 1978, $103 million was spent in welfare payments to persons receiving AFDC, General Public Assistance and other services. The total welfare budget of $228.7 million made up DHR's largest expenditure in 1978.

With 8,000 staff members and an operating budget of more than $423.5 million dollars in 1978, DHR continues to be the largest agency in the D.C. government. The 84-page annual report, which covers the period from Oct. 1, 1977 through Sept. 30, 1978, is available at libraries throughout the city.

The report was released at the DHR weekly press conference, where mental health services and a status report on the city's food stamp distribution centers were also discussed.

A recent appeal to financial institutions and businesses to distribute food stamps in 1979 drew expressions of interest in the program by the Metropolitan Savings and Loan Association, Cohen Insurance Company, Giant Food, Inc. and others, Russo said.

DHR officials said they are asking the U.S. Department of Agriculture to waive a restriction prohibiting food stores from distributing food stamps. Russo said the American Security Bank, which distributes food stamps through 10 of its branches, has continued in the program despite threats that it would pull out Jan. 1 because of administrative problems in providing the service.

A University of Minnesota study, conducted between July 1, 1977 and June 30, 1978, shows that the District of Columbia has the highest ratio of mentally retarded persons (137.7) in state-operated public institutions per 100,000 people.

Charles Inlander, recently hired by DHR to carry out a court order requiring Forest Haven, the city-run mental institution, to close within five years, said urban areas with high unemployment, housing problems and few community services are the hardest places to deinstitutionalize.

Inlander said the District must create more community residences and programs to educate prople about the needs of the mentally retarded if Forest Haven's 900-plus residents are to reenter the community.