The D.C. Department of Housing and Community Development has asked the city's inspector general and corporation counsel to follow up on a community group's failure to account for a large portion of funds it received for a renovation project on H Street NE, housing director James Clay said yesterday.

Both Clay and D.C. Auditor Otis Troupe have said that the H Street Business Community Association (HBCA), did not comply with repeated requests to furnish complete documentation on the disposition of $160,612 it received for the renovation project between 1979 and 1981.

"We will pursue it by having the inspector general do an investigation," Clay said. The results of an investigation could be referred to the U.S. attorney's office to decide if prosecution is warranted.

The president of the association, Lorraine Alexander, said that she has turned over documents to a certified public accountant for an "impartial" audit, but she declined to name the CPA.

An investigation by the inspector general "will be great with me," Alexander declared. "Why would I open my doors to them if I had anything to hide?"

She said that it is not true that she has withheld requested documents from the auditor.

The association's vice president, Ozzie Turner, also said the charges that the group's officials were uncooperative are unfounded.

"We opened the office to them . . . . They took what they wanted," he said. He said he was not responsible for the financial records, adding that "[Alexander] and the accountant handled those matters."

The auditor's final report on the H Street facade renovation project, released yesterday, said that of the $160,612 given to HBCA:

* $49,316 was not spent and remains unaccounted for.

* $16,650 was in checks written to cash, and no documentation was provided on how the cash was spent.

* A total of $36,921 was counted by the auditor as having been spent on administrative costs.

* A total of $74,375 went to local business persons in the form of grants and loans for facade renovation, including two loans totaling $12,000 to Alexander and two loans totaling $11,075 to Turner.

"Our review was completed in spite of a pointed lack of cooperation by the HBCA president, Mrs. Lorraine Alexander," Troupe said in his report to City Council member Nadine P. Winter (D-Ward 6), who had requested the audit months ago.

The auditor also questioned the use of Alexander's construction company on the project. The audit notes that Alexander said the company was used only to monitor work, but that the auditor could not verify this because Alexander did not provide the names of contractors used, the cost of the renovation work or other records on the renovations.

The audit recommends that HBCA be required to return the undisbursed funds to the District government, even if the principals--Alexander and Turner--have to pay it from their personal funds.

The audit also recommended that Alexander and Turner be barred from future dealings with the District government "based on the failure to be accountable for the H Street Facade Program."

Alexander and Turner were partners in a group called Suca Corp. that had proposed developing an office complex on a large piece of city-owned land on H Street. The city's Redevelopment Land Agency this week took the project from Suca because the corporation could not show any firm financial commitments for the project.