The United Planning Organization (UPO), once the main arm of the Johnson administration's war on poverty in the District of Columbia and Arlington County, has been forced to lay off 210 of its 500 employes and reduce services to the poor by half because of sharp reductions in federal aid.

"It's been a disaster," said Frank Hollis, acting executive director of the nonprofit, community action agency founded in the early 1960s as a conduit for federal antipoverty funds.

Last year, the agency received $6.8 million in federal community service grants, or 40 percent of its $17 million operating budget, to provide a wide range of social services, emergency relief, feeding programs and counseling to160,000 people.

This year, after the Reagan administration slashed the UPO's grant to about $3.5 million, the agency was forced to lay off workers and reduce its client load to about 80,000 people.

One of the agency's four day-care centers, adjacent to the UPO headquarters at 1021 14th St. NW, will have to be relocated to less-expensive quarters because the agency no longer can afford the rent. Also, the agency may have to eliminate its costly day-care services for infants, while continuing to care for older children, to make ends meet.

Moreover, the UPO and its subsidiary agencies have had to resort to a budgetary "juggling act" to keep their programs afloat, according to Hollis, because of delays by the federal and D.C. governments in getting the new block grant funds to them. Three months into the new fiscal year, the UPO has yet to receive a dime of its block-grant funds, Hollis said.

"This has caused a major cash-flow problem for us . . . and it takes away a lot of our flexibility," Hollis said. "It's a belt-tightening process you have to impose on all your grants across the board to sustain them."

Part of the problem stemmed from confusion within Congress and the Reagan administration in provisionally setting funding levels for six block grants in the absence of a new appropriations bill.

A spokesman for the U.S. Department of Health and Human Services (HHS) said last week that the grant funds began flowing more than a month ago and that the D.C. government should have passed along the first installment of the UPO's fiscal 1982 grant by now.

Mary Smith, a grant specialist with the D.C. Department of Human Services, acknowledged last Friday that the city had the money. She said the UPO would receive its first check within a week.

The cash-strapped organization staged a Christmas bazaar at the Pension Building on Saturday to raise additional funds.

UPO's plight is symptomatic of the budgetary problems and uncertainty facing many city agencies and community organizations that view federal block grants as their life blood.

In the past, these funds were parceled out through 33 separate categorical grants, with the federal government imposing restrictions on how the money could be used.

Under the guise of offering states greater freedom and flexibility in using those funds, the Reagan administration eliminated the categories and lumped the funds into six broad block grants. Simultaneously, the administration sharply reduced the amount of money available for each of the grants.

While the full extent of the cutbacks will not be known until Congress adopts an appropriations measure, city officials say the District of Columbia's share probably will be reduced by one- third -- from $36 million in fiscal 1981 to about $22.6 million this year.

The funds are used for a wide range of social and community-service programs, including preventive health care, alcohol and drug treatment, maternal-child care, and energy assistance for the poor.

"If the grantor the federal government is not certain what he's giving you, then how can you plan your programs?" lamented Diana Carsey, a D.C. budget official who oversees federal block grants. "This has created a lot of anxiety among nonprofit, community based organizations."

Gladys Mack, the D.C. budget director, said the sharp reductions in federal block grants "are going to cause us some serious problems with the maintenance of these programs."

Maternal-child care programs were among the hardest hit, she said. That grant was reduced from $7.4 million last year to an estimated $4.8 million this year.

While heating costs continue to climb, the grant for the D.C. Energy Office was cut from $5.7 million a year ago to an estimated $4.2 million this year. The agency provided fuel assistance to 21,000 persons last year, but will only be able to help about 10,000 persons this year, according to Shirley Brauer, an energy office official.

Brauer said the city fears that the Reagan administration will gradually phase out funds for the energy assistance program. In anticipation of that, her office will earmark 15 percent of its funds to encourage low-income families to weatherize their homes and reduce their future heating bills.

City officials stressed that the estimated $13.3 million cutback in block-grant funds reflected only a part of the city's problem with Reagan administration policies.

Overall, the city expects to lose about $50 million in federal aid this year, Mack said, including about $20 million for employment services. As a result, about 400 D.C. government jobs financed by U.S. grants will be eliminated, according to Mack.