The head of the city's HIV/AIDS Administration was fired yesterday by D.C. Health Director Gregg A. Pane, who said the agency's challenges in addressing the AIDS epidemic in the District needed new leadership.

Lydia L. Watts, appointed a year ago by Mayor Anthony A. Williams (D) to lead the administration, said she received a one-page letter yesterday in a face-to-face meeting with Pane, who made the decision to fire her. The move comes one week after a D.C. Appleseed Center for Law and Justice report concluded that the city had mismanaged and understaffed its response to HIV and AIDS in the District, where an estimated one in 20 residents is infected with the virus.

"There was an urgency that people expressed about taking this epidemic on," Pane said yesterday. "I felt that new leadership was needed for getting us where we needed to go."

Pane did not name a successor in the $114,000-a-year position but said he would do so in the next few days. He did not say whether the appointment would be on a permanent or an interim basis.

Watts, 45, had worked in public health for 17 years and was the health policy director for the Rainbow/PUSH Coalition in Chicago before coming to the District. She stressed yesterday in an interview that she was not disgruntled. She said she tried to push for reform in what she termed an overburdened and understaffed system, and challenged HIV-AIDS providers to report results that justified their funding. She listed her accomplishments: shortening the time for provider reimbursements from 120 days to 30, an HIV-AIDS town hall in Ward 7 that drew more than 100 people and sustaining a federal housing program for people with HIV and AIDS.

"I lifted people up, I gave them credit and at times I disciplined," Watts said. She said she had the background and experience to lead. "I just didn't have the support from the top," said Watts, who added that she was not given a reason for her firing.

The administration, which is part of the city Health Department, has come under criticism and public scrutiny for months on issues ranging from failing to compensate HIV-AIDS service providers in a timely manner to the lack of solid records on HIV-infected residents. The Centers for Disease Control and Prevention recently intervened after the department failed to meet deadlines for producing statistical data on HIV-AIDS rates in the District, and the federal agency criticized the number of vacancies in the administration.

Whitman-Walker Clinic, the region's largest AIDS services provider, reported in June that it would not meet payroll, a situation due partly to late reimbursements from the city. A D.C. inspector general report that month criticized the administration for not properly monitoring the organizations that deliver services to residents infected with HIV.

In its 170-page report, "HIV/AIDS in the Nation's Capital," D.C. Appleseed questioned the city's ability to manage, coordinate and supervise agencies and private providers in enrolling individuals in needed medical programs.

The report found that not enough attention was paid to HIV prevention education among teenagers, and said that without epidemiological studies, the city has little idea how best to serve people with HIV and AIDS.

Council member David A. Catania (I-At Large), chairman of the Health Committee, said problems such as provider payment did not improve under Watts's tenure.

"I am confident in Dr. Pane's leadership and ability to address these issues and identify a strong administrator," Catania said in a statement his office released yesterday.

Until he does that, the statement said, "we must be especially vigilant to prevent lapses in already vulnerable services."

But D.C. resident Barbara Smith, 47, who is HIV-positive and chairs the Metropolitan Washington Regional Health Services Planning Council, which sets funding priorities on HIV and AIDS, said that Watts showed exceptional concern for people fighting the disease and that they are concerned about losing an advocate.

"There is a lot of confusion right now, and this just makes it worse," Smith said.