D.C. City Council member H.R. Crawford's property management firm owes the federal government at least $64,000 in disputed fees and expenses and continues to violate a number of federal housing policies despite three years of criticism from federal officials, according to government auditors and other officials.

Crawford has waged a running battle with the U.S. Department of Housing and Urban Development since the spring of 1980, when the department's regional inspector general issued an audit challenging $133,658 in federal funds that Crawford Edgewood Managers Inc. had spent on 14 housing projects in the District and Prince George's County.

Among the items challenged by the auditors were the expenditure of nearly $4,000 in federal housing repair funds for political and social events, including $1,250 for tickets to a Kennedys-King Democratic fund-raising dinner, $350 for 50 basketball tickets for youngsters, $200 for a state legislator's fund-raising committee, a $300 contribution to the Southern Christian Leadership Conference and $1,000 for an employe Christmas party.

The auditors also challenged $41,000 in "excessive" management fees and expenses, $21,000 in "unallowable" consulting fees and $1,700 in loans to project employes.

Crawford, a Ward 7 Democrat who was HUD's assistant secretary for housing management in the Nixon-Ford administrations, said in an interview that local HUD officials have been quibbling over relatively minor expenses and have refused to reach a fair settlement.

"I'm trying my damnedest to clean this thing up," said Crawford, who is president and owner of the management firm. "In certain areas there were errors made. But HUD's conduct has been extremely unfair and unjust."

Crawford has repaid $24,000 of the challenged amount, including the funds spent for political and social activities. Auditors dropped their objections to another $28,000 in expenses after further documentation was provided by Crawford, according to the inspector general's office. Officials differ on the exact amount still outstanding, with estimates ranging from $64,000 to $84,000.

S. Daniel Raley, deputy director of housing management at the local HUD office, said the dispute with Crawford "has dragged on longer than we would like. There are some serious shortcomings. We pointed out the shortcomings to him . . . He should know the rules. He should have a staff that knows the rules."

In a letter last month, HUD's local office detailed 11 areas in which it says Crawford's firm still is failing to follow the department's required procedures, and gave him 90 days to show how he will correct the problems.

The letter said there was no evidence of any attempt to defraud the government.

While saying that his firm made some accounting errors, Crawford said HUD officials are now questioning expenditures they once informally approved to fix up several low-income projects that he began to manage after leaving HUD.

"These were troubled properties before I got them," Crawford said. "It looks like I did all this, but we just happened to be there holding the bag.

Crawford said he still believes the expenses for political dinners and events were legitimate. "Formerly, that was not considered to be a political thing," he said. "You're motivating people. You're developing leadership."

The 1980 audit said Crawford's firm had improperly mixed expenses among the various projects, billed excessive computer costs and charged payroll costs for one person who was not an employe.

The auditors said that Crawford's firm did not certify that some project residents were eligible for housing aid and that the firm improperly paid about $56,000 in expenses for the nonprofit owners of the projects. They also said that the firm paid too much for supplies from at least two companies that were partially operated by its employes.

Last month's letter to Crawford from Terry C. Chisholm, HUD's Washington area manager, said that Crawford's firm still has not resolved several of these management problems and therefore is continuing to charge the government higher management and project fees than the firm is entitled to.

"Your management operation and practices are not in full compliance with HUD policies and procedures," Chisholm wrote. "It is evident that more direct oversight is necessary to ensure appropriate and acceptable management practices . . . We are very concerned that the existing personnel appears not to have the ability to monitor the federal funds ."

Crawford, 44, a flamboyant and controversial businessman and politician, first gained prominence in the 1960s as a no-nonsense manager of Washington-area subsidized housing projects who cracked down on tenants who didn't keep their apartments clean or pay their rent on time.

He was appointed to his HUD post in 1973 and became one of the highest ranking blacks in the Nixon administration. But he was fired by President Ford in early 1976 after it was disclosed that Crawford had negotiated private consulting jobs with at least three public housing authorities that received federal funds through Crawford's office. The Justice Department investigated the matter but took no action.

Crawford later started his own property management firm, and was elected to the City Council in 1980.

HUD's Raley said he has twice referred the 1980 audit to the agency's national headquarters for a decision on whether Crawford should be barred temporarily from managing federally subsidized projects. Raley said that national HUD officials, in an unusual move, twice sent back the case without a recommendation.

George O. Hipps Jr., associate deputy assistant secretary for housing, said he did not know why the national office made no recommendation, and that no record could be found of the audit's referral to that office. In general, he said, "Three years is an unusually long time to have something of that nature unresolved."

Under rules in effect since 1981, HUD is supposed to resolve audit findings within six months. When asked about the long delay in settling Crawford's case, Raley smiled and said: "I'm a patient man."

Crawford says he has discussed the matter with agency officials and may soon take his case directly to HUD Secretary Samuel R. Pierce Jr. Crawford said he knows many officials from his tenure at HUD, but finds this a mixed blessing.

"You leave behind friends and enemies," Crawford said. "There are those within the department who feel there's a vendetta to get Crawford."

Crawford at one time managed as many as 2,300 units of federally subsidized housing in the Washington area. Gradually, that business dwindled and today he is under contract to manage 648 units in six federally subsidized projects, as well as a number of private buildings.

The federally financed projects he currently manages are Bethune House, Delta Towers, Gibson Plaza, Foster House, Kelsey Gardens and Lincoln Westmoreland, all located in the District.

Another Crawford firm owns Bethune House, but he has no ownership interest in the other five projects, which are owned by nonprofit groups.

Crawford said his problems with the inspector general began in 1979, when he was one in a series of managers who tried to repair the run-down Glenarden Apartments in Landover, where a separate audit questioned the expenditure of a total of $1.2 million in federal repair funds by several management firms, including Crawford's.

Crawford said that widespread publicity surrounding the problems at both Glenarden and Clifton Terrace, a low-income project in the District, prompted HUD officials to place local management firms, especially those run by minorities, under new scrutiny.

As a result, Crawford said, he has become the subject of "an everlasting, never-ending, continuous audit." He said he has hired some new staff members in an effort to improve the firm's management.

Crawford said he doesn't understand why the auditors challenged the $21,000 in consulting fees because he was asked to be consultant on one project and was directed to hire an outside consultant on another project.

Crawford said he also has repaid the money loaned to employes at housing projects, some of which the auditors said was never paid back. "If a person takes an advance on his salary, that's a normal business practice, like the Christmas parties," Crawford said.

All told, Crawford said, he is challenging about half the remaining $64,000 to $84,000 in disputed expenses, but he said the local HUD office has lost some of his documentation.

"This is a troubled office," he said. "This office does not have a good reputation . . . We'd send them folders and they'd be lost."