More than a decade ago, the Maryland General Assembly set up an office to aid people seeking development and construction permits in threading their way through state and county bureaucracies.

Even before the legislation passed, then-Gov. Marvin Mandel appointed a Prince George's County politician who had asked him for a job to head the office of permit coordinator.

But since then, the office has cost the taxpayers $1 million and accomplished virtually nothing, helping only 100 persons and firms, according to a just-completed management study requested by Gov. Harry Hughes that recommends abolishing the operation.

The 1975 legislation creating the three-person office, the new study said, was "admirable in intent but flawed in design." It said the office was "to eliminate unnecessary delay, unreasonable expense and duplication of effort" in obtaining permits. The study said the office has done none of these things.

The head of the office, Francis (Frank) J. Aluisi, in a seven-page rebuttal, noted that previous studies of his office and its mission have called for "more personnel and money for publicity. However, no funding has ever been forthcoming."

Aluisi -- the chairman of the Prince George's County commissioners from 1968 to 1970 and chairman of the nonprofit corporation overseeing the county's three public hospitals until he was fired from the post after a controversy over management last July -- receives $42,000 and full-time use of a state car in the permits coordinator's job.

"I'm 65 years old. I can retire tomorrow," he said. "I got no problem" with the office being abolished or its functions being transferred.

Norman Silverstein, a spokesman for Hughes, said the study was undertaken at the governer's request after state Treasurer William James complained about the office. Silverstein said Hughes has read the report, which was completed last month.

"The administration is evaluating the audit with an eye toward legislation that would abolish the office and transfer its ombudsman functions to the Department of Economic and Community Development," Silverstein quoted Hughes as saying, adding, "You'll probably see some action this session."

Mandel said Friday that the concept for the job predated Aluisi's appointment. The job was created because of "the tremendous amount of complaints about the length of time and cost of getting permits through the state and subdivisions. Frank knew government. I thought he and the job were the ideal combination."

Mandel said that Aluisi has "done a very effective job . . . whenever he's called upon . . . . People just aren't too aware the office itself exists. I don't guess it had enough tools to do the job . . . . "

The 58-page report by the state's budget and fiscal planning department said Aluisi's office has "major administrative deficiencies" and a "pervasive lack of accountability." Since August 1984, it notes, the Department of Economic and Community Development has had a full-time person responding to "red tape" calls similar to those Aluisi has handled.

Aluisi said Friday he has a $30,000-a-year deputy but has had no full-time secretary for a year. Instead, he said, he has employed a succession of 10 Kelly Girls.

"Today's Kelly Girl's baby's sick," he said. "I got to make a decision whether to stay here and answer phones or go to the legislature."

The study noted that the office received an average of just 60 incoming calls each month, only 45 of them related to permit or ombudsman matters.

In an interview in 1975, Aluisi told a Washington Post reporter that Mandel offered him the job even before enactment of the law creating the office. Mandel did so, Aluisi said then, after he asked Mandel "if he had anything available" in the state government.

Aluisi's undocumented full-time use of a state car also drew criticism. In the fiscal year that ended last June, the report said, Aluisi drove the car 24,280 miles, "consistent with his round-trip commute of 44 miles and his practice of meeting face-to-face with citizens and agency officials." However, he kept no daily log, having been exempted in 1976 from the required record-keeping.

Thus, the report said, "it was impossible to determine when the coordinator used the vehicle, where he went and the purpose of his visits."

On a "less objective level," the report said, Aluisi's "assistance is as freely given to an individual homeowner with a septic problem as to a major developer seeking to build a tract of new homes . . . . The coordinator makes himself available at the complainant's convenience.

"He conducts business on weekends and frequently travels to a complainant's home or business. The coordinator appreciates the importance of attitude -- that arrogance and indifference (whether real or perceived) create problems; and sensitivity and good will help solve problems, or at least make unpopular decisions more palatable."

But the auditors said Aluisi's praiseworthy ombudsman services were "underutilized" and his office "virtually unknown." To illustrate the problem, the report contains a circular diagram with arrows leading from "low budget" to "low profile" to "few complaints" to "low productivity" and back.

The office was to be a repository for all state permit applications and rules and regulations. The report said that the "incomplete and outdated" repository consists of information obtained from three agencies in 1976. In his rebuttal, Aluisi blamed the agencies.

"I could not force cooperation," he said.

Aluisi, the report said, "receives few documented requests for information from the public," and residents who do call are routinely referred to other state and local agencies that "can provide the requested information."

The office is supposed to coordinate joint hearings between state and local agencies but conducted only one, in 1976, that was "something less than a success" and "only confused and angered the residents who attended," according to the report.

The office has never conducted a consolidated hearing between state agencies, another mandate under the law, the study said.

State agencies, Aluisi said, do hold such hearings but do not invite his participation.

"In short," the report said, "approximately $1 million has been appropriated over the past 10 years to fund the coordinator's office to consolidate permit hearings and application procedures. Our study revealed that no discernible progress has been made toward achieving either objective."