While officials of nonprofit agencies watch city contract dollars shrink, they also complain that the District is a bad customer, sometimes owing them thousands of dollars for four or five months after contracted services have been performed.

The providers often must operate under interim agreements, trusting that contracts eventually will be signed for their services, they said. Without contracts, there is no guarantee that the level of funding will be maintained, and this has resulted in cutbacks on short notice, these groups said.

"They know the kind of people we are, so they do this to us all the time," said Mary Kidd, executive director of the Washington Area Council on Alcohol and Drug Abuse (WACADA). "We have a choice of turning people away" or trusting a contract will be signed and the city will pay, she said. "We go along with it, but it's not fair."

The city now owes WACADA $54,000 for services provided so far in fiscal 1983, which began in October, Kidd said. "We are about to be in a very, very bad position."

An organization can submit vouchers to the city for payment after providing a service for at least a month, and the city then is supposed to pay the group.

Donald Roose of Andromeda said his group had $40,000 to $45,000 in outstanding vouchers until he called the Department of Human Services and threatened to close Andromeda's doors if it did not pay on some of them. Now DHS owes the group $29,000, he said.

"The reality is that month after month and year after year--and it's getting worse--they don't pay," Roose said. "Nonprofits don't have these kinds of cash reserves."

James A. Buford, director of the Department of Human Services, agreed that payment on vouchers has been a problem but said the situation is improving. If the group is under a 12-month contract, automatic payments are supposed to go out on the same day each month.

The problem comes when the group is on an interim agreement rather than a formal contract, and it has been taking too long to get formal contracts signed, Buford said.

"It's a legitimate complaint," he said, adding that the department wants to get all its providers on contract. DHS has a rule now that all contracts and renewals are to be decided at least 120 days before they are to go into effect, but this has not always been possible, Buford said.

"We still have some way to go in getting it cleaned up."