A company with no experience in job training won a $ 6.6 million welfare-to-work contract from the District in December, and now the city's top welfare official is being investigated for her connection with the company's owner.

A. Sue Brown, acting administrator of the District's Income Maintenance Administration, rents her home from the company's co-owner, Arthur Stubbs, who also lent his own home for the wedding of Brown's niece.

D.C. Inspector General E. Barrett Prettyman Jr. is investigating whether Brown steered the contract to Stubbs's G&S Associates. Brown was placed on paid administrative leave March 1.

Brown's attorney, Frederick Cooke, said she would not comment on the case. The U.S. attorney's office and Department of Human Services Director Jearline F. Williams both declined to comment.

Stubbs's welfare-to-work contract is performance-based: The money is paid out over time as the services are performed. Stubbs also receives as much as $ 7 million a year from the city's Department of Human Service's Medicaid office to run a large network of group homes for mentally retarded individuals -- homes where medical neglect has been documented repeatedly over the last four years.

Human Services officials said that Williams requested the investigation.

Stubbs, who has dental practices in the District and Maryland, acknowledged in an interview that Brown is renting a house he owns in the Hillcrest section of Southeast Washington and that he had allowed his home to be used for the wedding. But he said that the real estate deal and the use of his house were unrelated to his business with the District.

Calling Brown the most ethical person he knows in the D.C. government, Stubbs said that he expects the current investigation to clear both of them.

Stubbs says he met Brown in 1994, when she was head of the D.C. Medicaid office and he was head of a large network of federally funded for-profit group homes for mentally retarded individuals. Brown approved his company, D.C. Family Services, to receive federal Medicaid money.

At that time, the company managing Stubbs's group homes was run by Steven Pullman, who had been convicted in the 1980s of embezzling public funds while chief financial officer of Vienna. Stubbs said he didn't know of Pullman's past when they worked together and soon broke ties with Pullman.

The wedding reception for Brown's niece took place at Stubbs's million-dollar Foxhall mansion in the summer of 1997. Stubbs described the use of his home as a "wedding gift" to Catrina Y. Brown, who had lived with her aunt for many years. Stubbs said that he offered his home after hearing that the niece's scheduled site had fallen through and that he was not present for the wedding.

That year, Medicaid gave Stubbs's group homes more than $ 6 million.

Brown, who was a civil rights organizer in the 1960s, has been a mainstay of the city government's poverty and public health agencies since 1985. She became acting head of the welfare office last year.

Last summer, the welfare administration began receiving proposals for contracts to help thousands of D.C. women get jobs as part of the federal welfare reform program. Brown chaired a five-member committee that evaluated 13 proposals for contracts.

The in-house Human Services evaluations, which were sent on to the Office of Contracts and Procurement, were completed July 22, sources said. Sometime between then and early August, Brown approached Stubbs about buying a home he had on the market, said Stubbs and others.

Brown hoped to buy the two-story house with a three-car garage and a gazebo. But after realizing she could not withdraw retirement funds without a tax penalty, she went back to Stubbs and said she could not afford the house, according to a source familiar with Brown's explanation.

Stubbs offered that she could rent the house with an option to buy, and she moved in soon after.

"It was going to be a lease-to-purchase arrangement, but we never worked out the details," said Stubbs, who added that a real estate agent was handling the home's rental and potential future sale.

In documents Brown filed with the D.C. Board of Elections and Ethics, she reported receiving no gifts from potential or current District contractors from 1993 to the present. City rules call for officials to notify the director of their agency in writing if they have dealings that could be perceived to create a conflict of interest.

"Issues like these are something that, clearly, people generally know you should report," said Jesse Goode, the general counsel for Human Services, who cautioned that he was speaking generally, rather than about this specific case.

Eight of the 13 bidders on the welfare-to-work grants were awarded contracts of varying amounts. Although the Office of Contracts and Procurement approves such contracts, the office generally relies on the recommendations of review committees such as the one Brown headed. Deputy Chief of Procurement Sandra Manning noted that management reforms instituted in January no longer allow agencies to put together their own evaluation teams, as Brown did last summer, and now require that outside experts serve on the teams.

The contract allows Stubbs to collect up to $ 6.6 million for managing the cases of welfare recipients who are expected to perform "work activities," which can include subsidized employment. The contract amount includes bonuses for each recipient whom the contractor places in full-time employment.

Under the federal welfare law, the District will lose millions of dollars if it fails to place a certain percentage of recipients in job-related activities.

Up to 1,500 welfare clients are slated to be referred to the G&S work site, a series of narrow rooms above Stubbs's dentist office on Eighth Street SE.

Several nonprofit providers said they were surprised in December when the unknown G&S showed up on the list of contractors.

"I've been in employment and training in this area for 16 years, and I'd never heard of them," said Fay Mays, of Davis Memorial Goodwill. "I will say it was interesting."

Metro researcher Bobbye Pratt contributed to this report. G&S Associates, a company that won a work-to-welfare contract from the District, is one of the businesses located in this building on Eighth Street SE. A. Sue Brown was placed on paid administrative leave March 1.