City officials need to "tighten accountability" over employees who violate the District's contracting laws, and those who cost taxpayers money should face "serious consequences," a top city official said yesterday.

Inspector General Charles J. Willoughby told the D.C. Council's Committee on Government Operations last night that violations continue. Direct vouchers, for example, which allow payments to be made without contracts, have been abused, he said.

"Controls are in place but are too often circumvented," Willoughby said, adding later, "There is a need to tighten accountability over individuals who initiate procurement actions, especially when those actions fail to comply with District guidelines and/or prove to be costly or inefficient."

D.C. Council member Vincent B. Orange Sr. (D-Ward 5), chairman of the committee, called the hearing after The Washington Post reported last month that the city spends hundreds of millions of dollars annually in violation of laws and policies intended to avoid waste and fraud.

Of $2.5 billion in purchases last year, about $425 million involved unauthorized payments and no-bid contracts, The Post reported.

Mayor Anthony A. Williams (D), who has said the contracting problems are not as extensive as The Post indicated, was criticized by Orange for not attending the hearing. Orange said the mayor, who was at a National League of Cities function in North Carolina, had agreed to testify.

Orange said he would subpoena the mayor if he did not appear at a hearing Dec. 19.

D.C. Auditor Deborah K. Nichols also criticized Williams for allowing Deputy Mayor Herbert R. Tillery to be the interim chief procurement officer for more than a year in what she said was a violation of procurement law.

Council members Jim Graham (D-Ward 1) and Kwame R. Brown (D-At Large) debated Suzanne J. Peck, the city's chief technology officer, who was quoted by The Post as telling a staff member to "exploit the hell out of the gray area" in hiring contractors. Peck called that an "extremely unwise expression" and stressed that she also told staffers to "never ever, ever go outside the law."

Council members criticized Peck and her colleagues for a number of high-priced contracts. One was to a start-up computer company run by a former $95,000-a-year consultant. When she quit her consulting job, she started a firm in Northern Virginia that was awarded 146 contracts worth $13 million.

"You made that person a millionaire," Orange said.

Another consultant, Sandy Lazar of Pennsylvania, who rents an apartment in Silver Spring, received contracts totaling more than $1 million. His salary is more than $400,000. Lazar said he has two contracts -- the one with the technology office and a $719,000 contract with the school system.

Graham, who grilled Lazar about the two contracts, said that by not having "the good sense" to rent an apartment in the city, the consultant was showing disrespect to D.C. taxpayers who are "lining your pockets."

Brown said the situation looked like the cronyism of the 1980s and that residents should be outraged by the technology office's actions and the mayor's silence.

"This gray area smells bad," Brown said. "It stinks."