Montgomery County's Merit System Protection Board has begun a wide-ranging investigation into allegations that the county misused federal funds in administering the Comprehensive Employment and Training Act (CETA) program, according to county officials.

The merit board, the independent watchdog agency that enforces Montgomery's strict civil service rules, has subpoenaed all the county's CETA records, including bank records, calendars, letters, canceled checks, and daily logs, according to Charles Maier, a county spokesman. Those records were placed under the protective custody of deputies from the county sheriff's office until the county determines how to respond to the requests for the records.

The merit board yesterday sent a letter to the County Council, asking for an emergency appropriation of $100,000 to conduct this investigation which the board estimated would take at least six to eight months, according to council press officer Lucille Harringan.

The investigation was prompted by complaints to the merit board from a retired county employe and at least two former CETA employes who had been laid off alleging that county officials assigned CETA workers to spend all or most of their time performing county government chores unrelated to CETA, according to documents obtained by The Washington Post.

Complaints also included allegations that federal funds earmarked to generate employment were actually being used for studies, conferences, and publication of a monthly newsletter.

County Attorney Paul A. McGuckian confirmed that the documents had been subpoenaed Thursday as part of a merit board probe. He said county officials believe they obeyed all federal requirements.

McGuckian said he is concerned that the merit board's request is overly broad and possibly outside the board's jurisdiction to investigate personnel-related complaints.

The CETA program was administered by Alan Kutz, who now works for the new Corporation for Technological Training, a public-private partnership to retrain displaced workers. Kutz yesterday said he could not comment while the investigation is pending.

The investigation concerns a time after a 1982 reorganization when the former Division of Labor Services, which oversaw CETA, was merged into the Office of Economic Development. At about the same time, the federal government scheduled the CETA program to be replaced by the Job Training Partnership Act, which would be targeted especially for areas with high unemployment. The changes forced some layoffs.