The District's top finance official, in a rare public break with Mayor Marion Barry, yesterday criticized Barry's decision to cancel a furlough of 21,000 government employees and said the city is "not facing reality" about the extent of its financial problems.

"I'm concerned about the government's credibility," said Robert Pohlman, the city's deputy mayor for finance, who said he feared the action would send the "wrong message" to employees, D.C. Council members and members of Congress.

"This city and the federal government are not facing reality," Pohlman said. "The financial managers of the District of Columbia can only do so much to Band-Aid and patch up the patient. If the doctors refuse to operate, the patient will die."

The dire warning from Pohlman, a self-effacing veteran of D.C. government service who gained a reputation for loyalty to the Barry administration, came amid growing signs that the government's financial fabric is unraveling.

The city's bond rating was reduced in May, tax collections have fallen substantially behind projections, major city agencies continue to overspend their budgets and now, officials say, the city is running dangerously low on cash, with the possibility growing that the government could miss a payroll.

Pohlman spoke shortly after Barry announced his decision to sign legislation requiring the city to give employees 90 days' notice before a furlough can go into effect.

The legislation, approved by the D.C. Council, effectively kills the administration's plan to require employees to take four days of unpaid leave in August or September.

The administration had proposed the furlough as part of a general financial rescue package to avert a projected $90 million budget deficit and ease the city's serious shortage of cash. Financial advisers had calculated that the furlough would save $4 million.

Barry and his top aides have said repeatedly in recent weeks that the mayor intended to veto the legislation, despite a strong lobbying campaign against the furloughs by local unions. But the mayor said yesterday that he had simply changed his mind, without offering a detailed explanation of his reasons.

"If President Bush, as strong as he felt about a matter {no taxes}, can change his mind, I can change mine," he said.

Barry also blamed the D.C. Council and its chairman, David A. Clarke, in particular for a "complete lack of cooperation" in solving the city's financial problems. He complained that council members refused to consider his most recent budget plan, which would have closed the deficit in 1990 with a combination of taxes and spending cuts.

Clarke, a mayoral candidate, said Barry was being "purposefully untruthful" in accusing the council chairman of blocking his budget plans. Clarke said he had wanted the council to act on Barry's latest proposals last month, but he was defeated by his colleagues. The council simply ignored Barry's request to consider a revised budget on the grounds that Barry could make the cuts himself.

"They do not have the will to be fiscally responsible," Barry said. He said the furloughs "were part of a package. But I'm not going to walk that road by myself."

Barry said the city remains in a "fiscal crisis" and will likely end the year with a deficit of $40 million to $50 million. But even more ominous, the city is running very low on cash, is a month late in making a $55 million payment to the D.C. retirement fund and a $31 million payment to Metro, and could even miss a payroll, according to financial officials.

Barry said that as long as he is mayor, "we will meet our payroll," but he said it was probable that the city would have to delay paying other bills. "Our vendors will feel a pinch," he said.

The administration's problems were compounded this week when the House of Representatives voted to cut $11 million -- or 2 percent -- of the federal funds in the city's budget for next fiscal year. The Senate has yet to act on the budget.

Also, the D.C. school board filed a lawsuit, seeking to block Barry's effort to require the public school system to reduce its expenditures by $10 million this year -- part of a series of cuts ordered by Barry.

D.C. Superior Court Judge Robert Shuker issued a 10-day restraining order late yesterday to prevent the proposed budget cuts.

School officials argued that Barry does not have the authority to impose cuts unilaterally on an independent city agency, a position disputed by the administration.

A hearing on the issue has been scheduled for Aug. 6.

"We're very pleased with the judge's ruling," said school board President Nate Bush (Ward 7). "It's a good sign that we have a strong case against the mayor."

Pohlman yesterday denied reports that he had stalked out of a meeting with Barry and other advisers Wednesday night, but he confirmed that he opposed the decision to cancel the furloughs.

He said the furlough "was necessary to deal with the financial situation, and it is necessary that everyone contribute" to solving the financial difficulties.

"But, let's be clear, the mayor makes the decision," he said.

Pohlman complained that he has repeatedly sounded the alarm about the city's finances -- to Congress, to D.C. Council members, to union members and to others -- to no avail.

"All too often the response is the same," Pohlman said. "We know you have a problem, but there's nothing we can do to help, and here are 10 more things you should be spending money on."

Before his news conference, Barry held a private meeting with about 50 union leaders. Sources said Barry sought to distance himself from the furlough idea, portraying it as an idea generated by Pohlman and other managers. By the end of the meeting, sources said, some labor leaders were furious with Pohlman.

At his news conference, Barry went out of his way to praise Pohlman for having done an "outstanding job" in handling the city's finances. He and other managers "disagreed with me," Barry said. "I'm the chief executive . . . ultimately it's my decision to make."