The District of Columbia auditor has concluded that an anticipated upturn in city government revenues has not materialized and that the city is headed for a $17 million deficit by the end of the current fiscal year.

Auditor Otis H. Troupe's projection is in sharp contrast to upbeat forecasts by Mayor Marion Barry that the revenue shortfall will be much smaller and that spending cuts will more than compensate for it, producing a $3 million surplus when the fiscal year ends on Sept. 30.

In June, Troupe had projected that the deficit would be only $10 million. In the new report, completed late last month, Troupe said his estimate of the potential deficit has grown because anticipated increases in revenues have not been realized.

"Unlike last month's report it does not now appear that this shortfall will be alleviated by other revenue sources," the report states. He cited a weakening in miscellaneous revenues, along with lower-than-expected revenues from the city's personal property tax.

Gladys W. Mack, the city's budget director, said she has seen the report but still sticks with forecasts of a $5 million revenue shortfall that will be erased by a savings program imposed on city spending. That $8 million savings plan will end up giving the city government a $3.1 million surplus, according to Mack's projections.

"They in the auditor's office have a different opinion," Mack said. "Our revenue estimates come from our revenue office, and we do have confidence in the estimates they have made."

Jeffrey H. Goldman, the deputy budget director, said the auditor's report does not take into account reductions in city spending made to compensate for revenues coming in below estimates.

City administrator Elijah B. Rogers has said under the savings plan, the city has limited its purchases and hiring to only "necessary" items and personnel. He has denied that a hiring freeze is in effect.

But despite Rogers' description of the cuts in spending, the chairman of the City Council's finance and revenue committee, John A. Wilson (D-Ward 2), has continued to predict that the city will face a deficit of $20 million to $40 million because of overspending in city agencies.

A city report on spending through April in the city's largest agency, the Department of Human Services, shows that the agency was running a $25 million deficit. But due to the allocation of nearly half of the city's $63 million supplemental budget appropriation approved by Congress last week, the city government is now predicting that the department will have a surplus of $500,000.

"We have a tight rein on spending in the department," said James Boyle, the controller for DHS. "We're not buying anything unnecessary. It's just about drugs and medicine. No frills. We're hiring only critical employes like nurses . . . no filing clerks."

"We anticipate the DHS budget coming in balanced," Mack said. "We've seen nothing to suggest it isn't holding." She said spending in the department poses no threat to the prediction of an overall $3 million surplus.

The auditor's report urges the city to begin an austerity program with a goal of $13 million in savings, about $5 million more than the savings plan Rogers claims is in effect.

"Such action is prudent if the District is to minimize the possiblity of an excess of expenditures over revenues for the current year," the report states.

Ronald A. Gaskins, a senior member of the auditor's staff who wrote the report, said the city's current savings plan--which includes a reduction in the city's anticipated contribution to Metro, due to reduced service on some bus routes--will not be sufficient to avoid the deficit.

"Most of their savings are coming from cuts in Metro," said Gaskins. "We've seen those numbers and think it's not enough to help with the drop in revenues. They are going to have to do more to avoid a deficit."