A District nonprofit organization that serves emotionally disturbed children has sued the city's mental health agency, saying it withheld grant funding and forced the nonprofit to close its office, lay off staff members and suspend some of its programs.

The Family Advocacy and Support Association has asked a federal judge for a temporary restraining order against the D.C. Department of Mental Health to prevent the city agency from dropping the group as a grant recipient. Also named as a defendant in the suit filed June 9 is the federal Substance Abuse and Mental Health Services Administration, which allegedly approved the city's actions.

In response, attorneys for the city and federal governments have argued in court papers that there was no breach of contract and that the suit should be dismissed. U.S. District Judge Ellen Segal Huvelle has scheduled a hearing for Monday.

The association was founded in 1987 and offers tutoring and summer programs for children and twice-monthly support meetings for parents. President Phyllis Morgan said the group had an annual budget of $75,000 before the funding problems arose.

She said it has a mailing list of more than 200 parents and social workers and serves about 75 District children annually who have attention-deficit disorder and other emotional troubles, including some who are in foster care or under court supervision for juvenile crimes.

The D.C. Department of Mental Health must provide community-based treatment to city residents under a court-supervised plan, which stems from a 1974 class action lawsuit challenging the quality of mental health services.

In this month's lawsuit, Morgan said her group helped the city agency several years ago in writing a grant proposal when the agency applied for federal funding so it could carry out the community-based treatment plan. As a result, the lawsuit said, the federal government in 2002 gave the city agency a six-year, $8 million grant for a program known as D.C. Children Inspired Now Gain Strength, a portion of which was to go to the association.

The lawsuit quotes from a federal site visit report that described the nonprofit organization as "the primary family advocacy group in the District of Columbia over the past ten years for youth with serious emotional disturbances and their families."

But the city was late in making payments during the first two years of the program, according to the lawsuit. And since Oct. 1, the group has not received any of the $50,000 it is due for the current fiscal year, the suit said.

Morgan said in an interview that she wrote a letter to the D.C. inspector general, asking him to look into the issue. She said she eventually was told in a letter from Martha B. Knisley, the city's mental health director, that federal officials had given her agency permission to award the $50,000 to other contractors.

After falling behind on the $800 monthly office rent, Morgan said, she closed the offices in Northeast Washington and moved the operation into the basement of her home in December. She stored office supplies on the shelves of her bathroom and brought in extra chairs to accommodate the parents' meetings.

"I really haven't been encouraging parents to come to meetings, because I don't have the room," Morgan said. In addition, the group's annual summer enrichment programs, including tutoring and Saturday trips, have been put on hold, according to the lawsuit.

Dennis Jones, who has served as a court-appointed monitor in the ongoing class action lawsuit since 2001, said that to his knowledge, it was the first time a nonprofit organization had filed suit against the mental health agency over funding.

Agency spokeswoman Linda Grant referred inquiries about the lawsuit to the D.C. office of the attorney general, which is representing the agency in the case. Traci Hughes, a spokeswoman for that office, said she could not comment on the case beyond what is in the court papers the city has filed, because the matter involves pending litigation.

Phyllis Morgan heads a nonprofit that serves disturbed children.