A $12.3 million federally funded construction project at Lorton Reformatory is nearly two years behind schedule because of mistakes by contractors, poor management by the D.C. Department of Public Works and other administrative problems, according to a report by the General Accounting Office released yesterday.

The report concludes one phase of a broad GAO probe requested last year by Sen. Arlen Specter (R-Pa.) after The Washington Post published a story raising questions about $41 million spent for a District prison education program known as the Specter Initiative.

In addition to the construction funds for seven vocational and education facilities, the GAO is examining the city's expenditure of $29 million for prison education programs. The agency's special investigations unit, which handles potentially criminal cases, has been brought into the investigation, and FBI agents have interviewed some D.C. Department of Corrections employes about alleged favoritism in contract awards, sources said.

Specter, who formerly headed the D.C. subcommittee of the Senate Appropriations Committee, led the fight for federal funds for the massive prison education effort that began in late 1983.

"It is very discouraging to see the District government fail to make proper use of the federal funds for an important pilot project for prisoner education and rehabilitation," Specter said yesterday. "It may be that Congress ought to have a GAO study on all the funds which we make available to the District."

The report on construction cites severe structural flaws in the concrete foundations of academic and vocational buildings and criticizes public works inspectors for failing to monitor the contractors' work properly.

As a result of these and other problems, only two of seven buildings originally scheduled to open October 1985 are now complete, according to GAO and public works officials. The delays have contributed to a $4.3 million increase in the cost of the construction, public works officials told GAO.

Corrections officials referred all questions about the report to the public works agency, which awarded the construction contracts and oversaw the project.

Cyril Crandon, administrator for design, engineering and construction, declined yesterday to answer questions about the report but said he will discuss its findings today. The public works official said three buildings will be complete by spring and contractors will be selected soon to finish the other four.

The GAO attributed the delays in construction to five factors: less time than normal for planning, an administrative reorganization that led to a new public works agency, the city's lengthy contracting process, inadequate oversight, and poor management practices, including the city's assignment of five different project managers during three years.

The report credited public works officials with making some improvements, including hiring more inspectors and rating contractors to prevent the repeated hiring of unqualified firms.

The flaws in the foundation of one building were so severe that the concrete had to be removed and the structure must be rebuilt, the report said.

Former corrections officials have questioned the city's choice of PSI Associates Inc. as a leading outside contractor for the prison education program. The project's first director said in an interview that James F. Palmer, the former director of the corrections department, pressured her to hire the firm against the recommendation of the agency's chief procurement officer.

Palmer has declined to comment on the allegation.