A Fairfax County antipoverty agency that got a Department of Energy grant to weatherize the homes of poor people instead used part of the funds to insulate the homes of 17 of its board members and employees, according to a federal investigation.

The report, by the department's inspector-general, also found that 20 of the 57 homes improved by Fairfax's Saunders B. Moon Community Action Agency were occupied by persons with incomes higher than those eligible for the federal assistance. The agency, which serves the county's poor Gum Springs area along U.S. Rte. 1 south of Alexandria, has been in repeated trouble with Fairfax officials over its expenditures and programs.

Ed Gadsden, project coordinator of the Moon agency, said last night that he had not seen the federal report, but he confirmed that the Department of Energy had suspended its contract with the organization last year.

Among ineligible owners whose homes received storm windows, weatherstripping, insulation and caulking were those of the Moon organization's executive director Calvin Ferguson, board chairman Thomas Brown and board members Louise Saunders and Eric Yarbough, the report said.

At least six homeowners who qualified for the federal aid failed to get the improvements that the Moon agency said it made to their homes, the investigators said. Moon officials could not account for the supplies.

In one instance, the report said, 15 storm windows were installed on a relatively new house that was equipped with Thermopane windows that should have needed no further insulation.

Where work was done, the report said, "serious discrepancies" were found. Storm windows were improperly installed, attics were inadequately insulated and weatherstripping and caulking were poorly applied.

The audit of Energy Department grants for insulating homes of the poor, which totaled $5 million in Virginia, also found other problems in a similar winterizing program in Richmond, and numerous instances of unsound purchasing practices, inadequate accounting and other serious problems in the administration of the state program. The report also criticized the state for not monitoring the work of its local agencies, and the federal department itself for not keeping tabs on the state and its subordinate agencies.

Earlier this year, Fairfax County supervisors bailed out the Saunders B. Moon Center, which had accumulated $110,000 in debts it could not pay. The debts had been accumulated by the antipoverty agency before county officials became trustees for its operations.

Fairfax officials blamed shoddy bookkeeping and a lack of trained employees for the poor business practices at the center on Fordson Road. The supervisors said money was missing from the program, but they did not charge its administrators with any wrongdoing.