Anna Lucas places her cane carefully as she walks from the bus stop to her house in one of Washington's forgotten neighborhoods because she must walk in the middle of the street.

Lucas and some of her neighbors in the Marshall Heights neighborhood of Southeast are still without sidewalks and curbstones 100 years after the first residents moved to the hilly and once-rural area on the Maryland border.

"It's time that the government did something out here," said Lucas, 80, as she stood in front of the attractive, one-story, brick house her husband built in 1937 in the 5300 block of Bass Place SE.

"We have a beautiful neighborhood here," she said. "We have trees and grass and it's cool in the summer. And we need sidewalks."

Five years ago, the city earmarked $5 million for the Marshall Heights street improvements but used only half the money for the work, according to a report released this week by D.C. Auditor Otis H. Troupe.

According to that report, nearly half of the $5 million authorized for the project either was not spent or was shifted to unrelated projects. For example, nearly $1 million of the fund was used to pay three consultants hired by the Department of Public Works to improve the financial management of the District's multimillion-dollar capital building program.

City Administrator Thomas M. Downs and other city officials acknowledged that some technical mistakes were made in handling the Marshall Heights program. While disputing other charges by the auditor, Downs said the city finished work on all streets designated by the City Council as top priorities.

Marshall Heights, a 20-block community bounded by East Capitol Street, Benning Road, Fitch Street and Southern Avenue, still has a feeling of country in its oldest section. Huge oak trees tower over the bungalow-style houses, many with large gardens and wide lawns.

Ten years ago, Lucas and many of her neighbors saw their dirt and gravel roads paved for the first time.

Today, about one-third of the neighborhood of tiny frame homes, sprawling four-story apartment buildings and public housing still has only pitted and patched asphalt streets and no sidewalks five years after the city's plan to upgrade them.

The neighborhood's four schools have nicely paved streets and proper sidewalks. But until they arrive at school, some of the children, such as 8-year-old Tanika Day, must walk in the streets because of the lack of sidewalks close to their homes.

Tanika, walking near Lucas' house yesterday, said that her parents had told her to be careful. "They say I shouldn't walk in the middle of the street," she said. "They say I should walk on the grass or close to the parked cars."

Marshall Heights, first settled by blacks who camped on their land while building their own houses, was mostly ignored by the city government until the '40s when some officials proposed designating the community an urban renewal area, demolishing the homes and building new ones because of the large tracts of undeveloped land.

The residents successfully fought that proposal but the heavily wooded areas were eventually replaced by apartment buildings and public housing in the 1960s and '70s.

Juan Scott, a contractor who was raised in the 5200 block of Drake Place SE, has just finished converting his parents' 50-year-old home from a one-story to a two-story house complete with fireplaces and larger rooms. He said he had bought and renovated a house for himself in another part of Marshall Heights.

"I think it is terrible," said Robert Scott, who built the family home in 1932. "I think it is unfair to have to sit and wait all these years for the city to do what's right."

Juan Scott, an energetic man wearing a jogging outfit and running shoes, fairly shouted at a reporter, "Where are my sidewalks?"

"I about killed myself redoing this house," he said. "I want to put in a driveway and some nice stairs. But I've been waiting four years for that new sidewalk. I can't finish the house until the city finishes the street."