At a tiny federal agency here that supervises the development along Pennsylvania Avenue, 14 of the 38 employes received special cash achievement awards for doing a good job this year.

They included the executive director of the agency, the Pennsylvania Avenue Development Corp. (PADC), W. Anderson Barnes, who received $5,000. He had earlier complained that his $47,500 federal salary was not enough to meet his personal needs.

Another federal agency, the Pension Benefit Guaranty Corp., gave $48,000 to nine senior employes under the achievement award program.

The agency's office services chief, Dale Virch, for example, received $1,500 for "sustained superior performance." His accomplishments, according to the award were realigning "office space to reflect new organizational relationships," handling of photocopying needs "on very tight deadlines" and for "personal responsiveness to all administrative service needs."

Christmas bonuses for federal employes?

Not exactly. But an examination of records from the little-known federal incentives program shows that this year 125,000 employes of the government received $25 million. Some awards were for specific inventions and suggestions that were traceable to savings to taxpayers.

But the records show, and Richard Brengel, director of the program for the federal Office of Personnel Management, says, that 90 percent of the awards were not justified by any specific money-saving act but were given for superior "managerial" performances.

In fact, about seven of every 100 federal employes got some such cash award, though most were for only several hundred dollars or less.

There is virtually no central review authority in the government for the awards. Agency and department heads grant the awards at their own discretion from unspent payroll funds that would normally revert to the federal treasury.

Brengel said that he does not concentrate on looking for abuse in the awards program but instead works at providing guidance. "I just don't think there are many instances of blatant misuse of the program. I don't think they [the awards] are given for favors or Christmas bonuses."

He added, "If we can't trust federal supervision to be able to use discretionary authority, when we're in trouble."

But an examination of the history of the $5,000 award to PADC director Barnes, the awards given at the pension agency and others show that there are some problems with the programs.

According to PADC records released under the Freedom of Information Act, the agency formally set up its cash awards program in January of this year. The first recipient was its director, Barnes.

However, the former chairman of the PADC board of directors, E. R. (Pete) Quesada, said that Barnes approached him as early as September 1978 complaining that his $47,500 salary was not meeting his personal financial needs.

Quesada said that Barnes produced a photocopy of a page out of the Federal Personnel Manual that detailed the achievement awards program. Underlined on the page were the words, "when employes perform in a superior manner," Barnes suggested that he be granted such an award as a menas of supplementing his salry, Quesada siad.

In an interview, Barnes would not comment on Quesada's account, because, he said, "I don't remember that conversation."

In an Oct. 27, 1978, letter, Quesada told Barnes, "Some six weeks ago you left with me the document [from the personnel manual], requesting that I make a cash award to you under its provisions. Andy, I am unable to approve the award that you seek. The Administration is exerting greater effort to reduce federal expenditures and has admonished all heads of federal agencies . . . to exercise the greatest possible restraint.

"In addition," the letter continued, "I am unable, even if those restraints were not imposed upon me, to award or recommend an award under the provisions of the document you brought to my attention."

Shortly thereafter, Quesada's presidential appointment as chairman of the PADC expired. In November 1978, President Carter appointed longtime Washington businessman and community leader Joseph B. Danzansky to fill his post. Danzansky had been on the PADC board prior to his appointment as chairman. (Danzansky died last month.)

Barnes said that he could not recall whehter he or Danzansky raised the issue of Barnes' cash award after Danzansky assumed office.

"I don't remember the precise circumstances under which the subject came up between us," said Barnes. "I didn't take his temperature every month to see how he thought I was doing, [but] he felt I had done a good job."

On Jan. 15, 1979, two months after Danzansky's appointment, he signed the recommendation for Barnes' award. He recognized Barnes for "sustained superior performance" during the preceding 15 months.

Barnes' award was not announced to the PADC staff or to the public, though one of the goals of the incentive awards program is to publicize meritorious achievements as an example for other federal employes to follow.

Last August, the PADC received a Freedom of Information Act request from a Florida law firm requesting the documentation for Barnes' award.

Within weeks of that request, Barnes initiated and approved 13 other cash awards to members of his staff, recognizing them for specific achievements or sustained superior performance. Among the highest awards were those to his development director, Charles Gueli, $3,500; his general counsel, Peter Meszoly, $3,500; his operations director, Tom Regan, $3,000, and his property manager and affirmative action officer, Jerry Smedley, $1,700.

Barnes said that the timing of these awards was not related to the disclosure of his own award under the Freedom of Information Act. He said that Danzansky had intended to expand the awards program last winter after Barnes' award was granted. Danzansky's illness, he said, prevented the program from going forward until the fall.

The average PADC bonus was six times greater than the average amount granted in other government agencies.

Brengel of the Office of Personnel Management said that he had not reviewed PADC's 1979 awards. However, after Quesada's account was related to him, he said, "That's just a blatant misuse of appropriated funds. That's a real horror story."

One set of awards that was partially challenged by Brengel's office this year were those granted by the former director of the Pension Benefit Guaranty Corp. (Pbgc). The PBGC was set up by Congress in 1974 to take over the pension plans of failing industries to protect workers who paid into those plans.

The PBGC operates much like a private corporation -- though government owned -- and is funded by the pension payments of workers from companies that have gone out of business.

In July, one of the members of the PBGC's advisory committee wrote a letter questioning the $48,000 in cash awards. The awards were granted by then-PBGC director Matthew Lind to nine senior employes.

In his letter, Richard Fay, the advisory board member, asked that the awards be rescinded because, at the time, the PBGC was seeking to reduce benefits to pensioners whose benefits were under the control of PBGC.

"These cash payments at this time create an unfortunate impression of insensitivity to the sacrifices that are being asked of retirees," Fay wrote.

Brengel said that his office reviewed the PBGC awards and determined that Lind has exercised "poor judgment" in the method by which the awards were granted.

Without addressing the merits of the nine awards, and 13 other cash awards granted by Lind this year, Brengel said the documentation used to justify them was inadequate in some cases.

In a letter to PGBC's new director, Brengel said that the cash awards plan developed by PBGC "lacks the basic safeguards against abuse of awards authority . . . such as requirements that awards be based on performance appraisals and the recommendations of the organization's performance review board."

In a telephone interview, Lind, who now is a vice president for the Travelers Insurance Co., defended the awards. He said that each was based on meritorious contributions made by the PBGC employes who received them.

The incentive awards program is being expanded under President Carter's Civil Service Reform Act of 1978. The reform act raised the dollar amount of awards that agency directors can grant without office of personnel management review from $5,000 to $10,000. However, only a handful of awards each year exceed $10,000. CAPTION: Picture, W. Anderson Barnes received $5,000 in extra pay.