The federal "war on poverty" is being lost through incompetence, waste and fraud, according to a report being released today by a House subcommittee.

The target of the report is the $700 million Community Services Administration, the federal antipoverty agency set up in 1974 to replace the Office of Economic Opportunity.

"CSA has forfeited a great deal of credibility not because it has been unable to eradicate poverty, but because it has wasted precious resources in the attempt," says the report by the Manpower and Housing Subcommittee of the Government Operations Committee.

"As a result, federally funded efforts to benefit the poor have often been dissipated through mismanagement," the report says.

CSA, as was its predecessor, is supposed to help the nation's poor become "economically self-sufficent" by channeling federal dollars into "community action agencies" and "community development projects."

The community action agencies are supposed to serve as local antipoverty offices, employing community members in senior citizen programs, home insulation projects for low-income families and a wide range of other services.

The development projects are supposed to create new businesses and jobs in low-income areas.

But the report contends both functions are hampered by "unworkable organization," and "loose supervision" at the national level that have resulted in a variety of personnel and financial abuses.

For example, the report says: "One (CSA) employee at the GS-9 level advised the subcommittee that he could write his own travel orders with almost certain approval while neither justifying the need for travel in advance nor reporting on it after occured."

In another case, a $30,000-a-year CSA employee who was supposed to be on "loan" to an unidentified university stopped showing up for work without contacting the university or the federal agency, the report says. During his absence of several months, however, the employee continued to draw his federal salary.

The agency "accidentally" discovered the unnamed employee's absence and confronted him through its general counsel, after which "the individual tendered his resignation," the report says.

The agency sought charges against the employee, the report says, but the "Department of Justice . . . declined prosecution for fraud and refused to even bring a civil to recover the salary paid . . . [because of] the obvious culpability of the agency in failing to have an effective system for the submission of time and attendance cards."

Other CSA employees were discovered to have embezzled funds, but they were never prosecuted "because the agency's inaction, or action, condoned the conduct . . . at the time it happened," according to the report.

The 71-page report details a variety of other alleged abuses and instances of mismanagement. In summary, the complaints are that:

CSA has yet to accomplish "major agency priorities," such as the reorganization of its nearly 1,000 employees into "a structure that will permit it to do its job."

Economic development programs administered by the CSA "exhibit an unacceptably high number of failures and serious problems."

"The standards of performance in the agency, notably in the central office, are significantly below those of the government in general. The work of diligent and dedicated employees is offset by others who do very little . . ."

CSA has no method of assuring that the federal monies it administers are properly accounted for. As a result, the agency has accumulated nearly $29 million in questionable expenditures.

The subcommittee issued an earlier report 18 months ago, chastising the CSA for mismanagement. Its latest criticisms are not designed "to build a case for abolishing the new agency," the subcommittee said in the new report. However, one subcommittee source conceded that the report should be taken as a warning to CSA "to clean itself up."

William Allison, the new CSA deputy director, said he is confident the agency will survive.

"I don't think you can make a judgement on the ability of this agency to meet the needs of the poor based on the admittedly poor record of the past," he said. "We're under new management . . . I think this agency can play a pivotal, innovative role in developing programs to help the poor."