The D.C. city auditor is trying to trace the distribution of $160,611 in federal money for a facade renovation project along the riot-torn H Street NE corridor, after a D.C. City Council member raised questions about how the funds were spent.

The D.C. Department of Housing and Community Development received the federal community development block grants in 1978 to repair and renovate the facades of businesses along H Street from Third to 15th Streets, one of the city's major shopping centers until the 1968 riots left many of the stores severely damaged. The area has been the focus of many renewal plans since the riots, and the city currently is working on an overall development strategy for the corridor.

Some of the 17 businesses listed by the city as receiving loans and grants under the program have complained that the work they received was not worth the value listed by the city, according to City Council member Nadine P. Winter (D-Ward 6), who represents the area and who called for the audit.

"That was my pet project, to get the face-lift money," said Winter, who says she sees little evidence of renovation work having been done.

Officers of the H Street Business Community Association, the group given authority by DHCD to distribute the renovation funds, said that the businesses that received the funds had their fronts substantially renovated. They strongly disputed suggestions that more could have been done with the money.

"What will $160,000 after administrative costs do? All these buildings were burned out, boarded up. What did she Winter expect to see?" said Ozzie Turner, owner of Rocket Cleaners at H and Fourth streets NE and vice president of the community association.

Interviews with merchants who received some of the funds produced a mixed response, with some saying they were satisfied with the work done and others saying they were not.

Available records on the distribution of the funds are unclear. The DHCD lists $75,000 in renovation loans or grants disbursed for 17 businesses since the project began. The department said another $23,950 was approved for loans but apparently has not been disbursed, and that $10,980 is still on hand to be allocated. DHCD Director James Clay said the remainder of the funds--about $50,000--probably went toward administrative costs.

DHCD officials said their records are based on reports from the H Street Business Association, and they are doing their own audit of the project. Clay said he is aware of no improprieties in the handling of the funds.

D.C. Auditor Otis Troupe last week faulted the department for not having more complete information on the distribution of the funds. "They the department have not been able to give us the kind and quality of data we need" to do the audit, Troupe said.

Winter also questioned the dual role played in the project by Lorraine Alexander, who is both president of the community association and head of a construction firm listed in housing department records as the contractor on most of the renovation work.

Both Turner and Alexander said Alexander's firm was used merely to oversee the work done by various other contractors. The community association decided they needed this control mechanism after two merchants who received funds directly early in the program did not use the money for rehab work, they said.

Alexander said a total of $8,000 to $10,000 was given to those two merchants, whom she declined to name. She said they are not among the 17 businesses listed by DHCD.

Alexander said neither she nor her firm--H Street NE Construction and Development Co.--was paid anything for their role in the project.

"I never made a dime," she said. "I spent all this time and all this effort just trying to make H Street work."

Alexander herself received a $7,500 loan to renovate a shop she owns, the A&W Deli at H and Fourth Streets, according to housing department records. She said she plans to pay back the loan. The deli was renovated but is now closed temporarily for personal reasons, Alexander said.

Few payments have been made on any of the loans, because the association decided in 1980 or 1981 to tell people that they could start paying them back whenever they had a few dollars, Alexander said. She said any repayments were to be used by the association for H Street.

When loan repayments came in, sometimes they were used by the association for things like helping one merchant replace meat ruined when his freezer broke or paying an unusually large light bill for another business owner, she said.

Alexander said that complaints about the handling of the project are coming from rival organizations on H Street that want to discredit the association and its officers so they can receive the next round of federal grants for the corridor.

Alexander said Winter was never involved in any of the planning of the facade renovations and that if the councilwoman is concerned about what is happening in the area, she should call for an investigation of all the community groups along the corridor that have received government funds over the past decade.

In interviews this week, a number of merchants listed as getting rehab work expressed satisfaction with the renovations, but some questioned the value or quality of the work done for them.

Moe's Liquor Store at 1205 H Street NE, for example, was shown by DHCD as receiving $7,000. But James Pratt, who says he and partner Louis Richardson own Moe's jointly, said they never received anything like $7,000 in either money or work.

"We had the front of the building painted. That's it," Pratt said. That was done four years ago and was worth no more than $1,000, he said. The entire front of the store was to have been renovated but never was, he said.

Alexander said the work was not done because the city never came through with the necessary permits for the planned renovation. The association stills lists Moe's as an incomplete renovation, to be finished whenever the licenses and permits come through, she said.

James T. Metcalf, listed as receiving $5,000 in loans for Micky's Lounge, said extensive renovation was done and that he was "happy and very pleased" with it. His business got a new door and a bay window, iron bars for security, and new lighting and paint, he said.

Norman Brower, owner of Norman's Billiard Parlor, and Earnice Curley, owner of Earnice's Beauty Services, said substantial improvements were made to the facades of their businesses and that the association did all it was supposed to do.

Boxley Furniture was shown as receiving $7,000 in loans for renovation. Owner George Boxley said he did not know if the brickwork and window replacement done on his building was worth that much, but he was disappointed in the quality of the job done.

Another merchant along the corridor, who asked not to be named, said that the work done on his business was not worth the amount of money listed for his building, but added that it didn't matter to him because he didn't personally pay anything for it.