The Alexandria commonwealth's attorney has been asked to review an an independent audit of a $700,000 investment fund to determine if any of the monies were used improperly by a former director of the city's housing authority. The fund, discovered this spring, apparently had been maintained secretly for more than a decade.

City manager Douglas Harman, who requested the review, last week told the city housing authority that after evaluating the audit he had concluded there may have been "serious administrative improprieties on the part of the former ARHA (Alexandria Redevelopment and Housing Authority) director Harland Heumann."

In a memo outlining his concerns, Harman noted that, based on the audit, he did not believe any of the funds had been used illegally. The memo, along with Harman's request, was turned over to Commonwealth's Attorney John Kloch.

Kloch said this week he is reviewing the independent audit, which was released last week, and expects to complete the review next week.

Heumann, director of the agency for 29 years before a reorganization in 1977 named Harman to the top position, has been the subject of considerable controversy since a housing official inadvertently discovered the $700,000 fund in March. When the discovery was made, Heumann was on leave from the agency, with plans to resign in May. He officially left the department early last month.

The money, derived from the sale of two parcels of land to the city in 1968 and 1969 and deposited in five accounts around the city, was discovered when a $73,000 interest check from one of the accounts landed on the desk of Angus Olsen, the agency's new director. According to Olsen, only one employe had been instructed to record the checks in a separate ledger.

While the independent audit revealed no misappropriations of funds, Harman told the housing board that the fund apparently had been used as a "personal petty cash fund." Harman said the audit showed that Heumann spent "several thousand dollars" on travel, flowers, parking tickets, dues and memberships. None of the expenditures, Harman said, was approved by the agency's board.

Heumann did not use the fund after the reorganization in 1977, according to the audit.

In his memo, Harman strongly criticized Heumann for keeping the money secret at a time when the agency ws facing severe budget problems. During its undisclosed existence, Harman said, financial constraints delayed for five years the construction of several public housing projects, and a high-rise for the elderly ws forced to open without adequate staff.