The District will divide $30 million in reserve funds for education between traditional and charter schools, officials said yesterday, giving $10.3 million to the school system and the rest to the rapidly growing alternative schooling movement.

The decision leaves both types of schools significantly short of the money they say they need and are entitled to under a per-pupil funding formula introduced this school year in a new budget process that was widely condemned and is already being revised.

"I think everybody concedes that this process was horrendous," said Nelson Smith, executive director of the Public Charter School Board. "We're both getting shortchanged."

Smith said charter schools, whose rolls nearly doubled this year from 3,500 students to 6,980, deserve $25 million of the escrow money, which was set aside until enrollments were finalized. But the school system, he said, deserves $14 million under the formula, because its enrollment declined by only about 1,100 students.

"There was just never enough in the budget," Smith said.

The shortfall could be severe for D.C. School Superintendent Arlene Ackerman, because the city also slashed her request for transportation and private school tuition payments for special education students from $100 million to $75 million. At the same time, Ackerman has moved hundreds more children into the costly special education programs.

City officials want her to trim those costs, which account for a disproportionate share of the system's budget. They said reserve funds could be tapped later this fiscal year if her administration trims spending but still has bills to pay.

"We've got to look at what those costs are and track what they are and control them," said Francis Smith, executive director of the D.C. financial control board. "There's not a limitless supply of money."

Ackerman said that she will do all she can to hold down special education costs and that she will save money by cutting back on overtime and not filling vacancies in the central office. "We are not going to cut anything in the schools," she said.

The school system will receive $582 million in local funding this year, up from $556 million last year.

In deciding how much money to give charter schools, the District refused to pay for 655 students who haven't provided documents proving they live in the city. An appeals process will be set up, but the decision means two high schools, Richard Milburn and Booker T. Washington, may lose funding for more than half their students.

"It says to charter schools: 'Throw these kids out on the streets because they can't prove residency,' " said Robert Cane, executive director of Friends of Choice in Urban Schools.

He agreed that only D.C. residents should be funded but questioned whether the city's verification process is fair to students who are homeless, illegal immigrants or extremely poor.

Schools officials and education activists also decried the delay in deciding how to allocate funds until nearly five months after the start of the school year. Some charter schools have had to borrow to pay staff and bills.

D.C. Council member Kevin P. Chavous (D-Ward 7), chairman of the education committee, has appointed a committee to revise the budget process. Ackerman is pushing to separate funding for growth in charter schools from the school system's budget. "Then we can really do long-range planning," she said.

In a separate matter, the advocacy group Parents United for D.C. Public Schools has accused the District of reneging on a lawsuit settlement that reserves 27.5 percent of all long-term city borrowing for school construction. City officials say only 20-year bonds are defined as "long-term," while Parents United wants to include a share of 15-year bonds.

Delabian Rice-Thurston, the group's executive director, said the funding disputes raise doubts about the city's commitment to public education at a time when Mayor Anthony A. Williams and the council are moving to take over the school system.

"The first thing that they ask is how little can they spend and still get by," she said. "That's not the approach I want to see."