The District's child welfare agency, which is facing a $24 million shortfall, is spending $3.4 million to move its offices to a five-story building being renovated in Southwest Washington.

More than half the money, about $2 million, is going toward new furniture, including $100,000 for the offices of the agency's chief and her two deputies, the reception lobby and a conference table and chairs.

The timing of the expenditures is being questioned by D.C. Chief Financial Officer Valerie Holt, who recently projected that Child and Family Services would have the largest shortfall of any city agency this fiscal year. Last fall, the agency finished spending its $107 million budget two months before the end of the fiscal year that ended Sept. 30 and fell several months and millions of dollars behind in payments to foster parents.

"We understand all employees need a decent working environment," said Holt's spokeswoman, Lucy Murray. "We would question whether this purchase could have been done for less, in light of the fact they are projecting a $24 million fiscal challenge for this year."

Ernestine F. Jones, the court-appointed receiver for Child and Family Services, acknowledged that some D.C. officials are questioning her agency's move but said her staff currently occupies offices in five buildings, including some in poor condition, and needs to be in one facility to operate more efficiently.

"Various individuals have expressed concern regarding our budget shortfall for this fiscal year and are questioning our reasons for moving at this particular time," said Jones, whose office is one of four D.C. agencies that operate under court supervision because of past organizational failures. "Relocation is not a matter of convenience; it is a matter of necessity. This process has been underway for more than two years."

Jones said the child welfare agency's current office at 609 H St. NE is "overcrowded, dirty and in major disrepair." But visitors to her office, at 900 Second St. NE, find that it is clean with a reception area that has comfortable seating.

Jones said that because her staff is spread out into several offices, communication is a challenge and travel time is extensive.

Holt's recent report listing the expected budget shortfall for Child and Family Services came after she requested annual spending estimates from city agencies. It is not clear from the information provided to Holt's office whether the moving expenses were counted as contributing to the $24 million shortfall expected for Child and Family Services. Holt has asked the agency to explain the reasons for its expected shortfall.

Holt's office already has asked the District's inspector general to investigate allegations of financial mismanagement and shoddy accounting in Child and Family Services. Among other things, the probe would examine whether a lack of financial controls led the agency to misspend hundreds of thousands of dollars by paying a group home for troubled youths triple what it was owed.

The first wave of Child and Family Services workers is scheduled to move into the new leased offices at 400 Sixth St. SW in the last week of January, but renovation of the building is unlikely to be completed by then.

On Friday, construction crews were still pouring concrete and installing floors and ceilings. A yellow ribbon, similar to the ones used by the police to mark crime scenes, warns passersby to use caution on one side of the building. Inside the windows on the first floor, red signs are posted requiring those in the area to wear hard hats.

In the back of the building, workers are moving in some furniture for the building's top two floors. The relocation will include furniture for 400 cubicles and 250 private offices.

The $2 million cost of the furniture, first reported by Washington City Paper, includes $350,000 for the cubicle settings and $200,000 for the offices of program managers, supervisors and executive assistants.

Referring to the agency's purchase of new furniture, Jones said, "The bulk of the furniture at our main location on H Street belongs to the Department of Human Services. We are taking existing furniture from our other locations and have purchased new furniture to meet the needs of staff."

Judith Meltzer, senior associate for the Center for the Study of Social Policy, the court-appointed monitor of the receivership, said the agency took steps to keep the cost of the furniture within budget. She said she was assured that the two-year contract was competitively bid.

"They're paying for furniture over two years because of budget pressures," she said. "I understand how something all of sudden can seem like an extremely large expense in tight times, but this is a reasonable cost of doing business."

Besides the furniture, the relocation package includes $490,000 to consolidate the agency's telephone systems and add phones and lines; $400,000 for 24-hour staffed security; $250,000 for an electronic security system; and $180,000 for an electronic filing system.