D.C. Auditor Otis H. Troupe said yesterday that the University of the District of Columbia has begun to correct a lack of financial controls that enabled former president Robert L. Green to overspend one university account by $257,000 in less than two years.

Troupe, testifying at the fourth hearing by the City Council's Education Committee on financial practices at the publicly financed university, said that excessive spending by Green should not reflect badly on "the dedication of the faculty or the integrity of the students" at UDC.

Troupe echoed Acting President Claude A. Ford, who told the committee that despite lingering problems, the university "is alive and moving ahead."

But for the first time Troupe gave the committee a picture of the extent of overspending by Green, saying that more than half of the university's $635,000 postsecondary education account was "for spending related to the president's office."

The postsecondary account is made up of tuition revenues and other fees collected by the university. Troupe said that in fiscal 1984 Green overspent his own budget by $178,000, and that he did so by $74,000 in fiscal 1985. Troupe will release a final report on the account in three weeks, he said.

Green resigned under pressure Aug. 23 -- 10 days short of his second anniversary as president -- after disclosures that he had misspent thousands of dollars of UDC funds.

Troupe also said that Green's office awarded 35 contracts to 10 persons during his tenure and that only one contract complied with university regulations. Only four of the consultants produced reports, Troupe said, and those "were of questionable value to the university."

Green said last week that he had not had a chance to review Troupe's findings and that he had never been privy to the data used for Troupe's investigation.