The federal government is withholding nearly $14 million in public housing funds from Washington because of the city's longstanding failure to substantially reduce vacancies in public housing units and to keep track of losses caused by vandalism.

The decision by the U.S. Department of Housing and Urban Development to withhold $13.7 million public housing renovation funds is part of a new get-tough policy instituted by federal housing officials to force public housing agencies to make needed improvements, said a local HUD official.

HUD decided last October to hold up all federal public housing funds due the District, a total of about $36 million.

Earlier this month $21 million in operating funds was released after new housing director James E. Clay convinced federal officials that the city had improved its rent collections in public housing units.

But HUD has refused to release the remaining funds until it sees whether new city plans for repairing units and reporting vandalism costs will result in improvements, Clay said.

HUD officials said their agency has been calling on the city to better its performance in both these areas for more than eight years.

"Clearly we have not done the best and most efficient job, but I think we will begin to show some progress in an organized way," said Clay, who became director March 1.

Clay said a special crew of 10 to 15 painters, carpenters and electricians has been formed to fix up units that need moderate repairs in order to re-rent them.

That crew is slated to repair 125 units a month, Clay said.

The department currently has 445 vacancies, he said, but new vacancies occur daily. Outside contractors will be hired to repair units needing more extensive work, he said.

The bulk of the money used to operate the city's 52 housing projects, containing nearly 12,000 public housing units, comes from the federal government. The city government has budgeted only about $7 million of its own money to operate public housing during this fiscal year, which began last Oct. 1.

Public housing is home to nearly one-tenth of the city's population. Much of the housing is among the worst in the city and is occupied mainly by single mothers with two to three children who receive public assistance and by elderly women who receive small Social Security payments.

Part of the $13.7 million that HUD is still withholding is slated to be used in 24 projects to modernize kitchens and baths and to replace roofs and heating lines. The remainder is earmarked to pay part of the costs of the complete renovation of the Lincoln Heights and Richardson public housing projects in Northeast Washington.

HUD officials said city housing officials have been taking 30 to 45 days to repair units needing minimal repairs and 60 to 90 days for units needing extensive work.

Clay disagreed, saying minimal repairs usually took 10 days and the more serious repairs up to 90 days.

"We're just as anxious as they federal officials are to get the vacant units back on line to start earning some income" and reduce vandalism costs, Clay said.

Federal officials also said that the city had never developed a system that would show how much is spent on vandalism-related damage and how much it would cost for a security system to reduce those costs. Clay said the department is still preparing the vandalism information.

Public housing agencies in the surrounding suburban jurisdictions have received their federal funds, HUD officials said.