The letters went out to hundreds of D.C. teachers last month from Acting Schools Superintendent James T. Guines, informing them that the school system was about to begin a "Professional Development Institute" for "persons who wish to become principals and assistant principals." As an added feature, teachers were told they could earn a master's degree by attending the institute for 10 hours on each of 20 consecutive Saturdays.

There is one problem still facing the 75 teachers attending the Saturday sessions: The school system has yet to get an accredited university to participate in the program and to award the degrees.

Moreover, the school which has agreed to offer two courses at the institute for graduate credit -- the University of Massachusetts -- is not licensed to conduct classes in the District of Columbia. City school officials also are negotiating with Massachusetts to offer a full master's degree program, according to university officials, but no decision has been made.

Some D.C. school board members have begun to ask questions about the hastily devised program, especially about the $60,000 the school system has set aside to help finance the institute at a time when there is a pending $5.4-million school budget deficit and furloughs of school system employes are being considered.

If the 75 teachers do earn their master's degrees, they could each earn as much as $1,400 more annually.

One school board member, Carol Schwartz of Ward 3, expressed concern that the instructional staff lined up to teach at the institute and coordinate it are current or past school system employes. One of the staff members is Ernest E. Sargent, the system's former finance director who was fired a few years back for alleged misconduct and now is doing consulting work for a board committee headed by member R. Calvin Lockridge. Minnie Lockridge, a retired principal and Lockridge's wife, is one of the institute's coordinators.

George Arnstein, one of five city commissioners who helps license higher education programs in the District of Columbia, said the "school district has no business designing a master's degree program. The university does that." He said that D.C. appeared to be "shopping around for a university to accept whatever [local school officials] have formulated."

The institute was the brainchild of Rhody McCoy, the recently appointed executive assistant to Guines and a close friend of Lockridge, who was accused by some educators of "selling degrees" at the University of San Francisco when he set up a program in the late 1970s in which teachers could earn a master's degree in 20 weeks. The program was discontinued when McCoy left the university.

"When I read the list of instructors," Schwartz said, "I just thought, [they] are too close to board members." She has asked a board committee to inquire about the details of the institute's operation.

About 500 teachers tried to get into the master's degree program. Guines directed school principals to give teachers time to be interviewed and McCoy made the final decision on which teachers were accepted.

Board member Linda Cropp said several teachers who called her about the institute had the impression that they automatically would be considered for an administrative position upon completion of their work at the institute. A list of principal and assistant principal vacancies was attached with Guines' letter promoting the institute.

Later, however, McCoy told some board members that the participants in the institute would be given no edge for promotions over those who have not participated.

Four teachers who are enrolled at the institute said in interviews that they have been given no assurance of promotions. They said they think the program has already been beneficial to them in their teaching jobs, but they said they were unclear about what specific work they will be required to do to obtain their master's degrees. They referred all questions to McCoy.

McCoy refused to elaboratge on the institute beyond what was written in a "program description" some teachers and board members had been given. That paper said teachers "who applied for a master's degree in administration-management, curriculum and instruction or community education" would get their degree "upon paying the university tuition" and "completion of the program of 20 weeks and the internship." The internship is to be in the business community, Guines said, to expose school system employes to "executives in the private sector." But McCoy said he has not yet decided how long the internships will be.

Studients can also attend classes three evenings a week if they require extra time to complete the institute's requirements, according to the program description.

Cropp said it is unclear how the $60,000 in school funds will be spent. At first, McCoy told board members the instructors in the program were to be paid salaries. He said yesterday it "has not been decided" whether the instructors will be paid.