ORANGE COUNTY IN BANKRUPTCY : Besieged County Seeks to Pay Nonprofit Groups : Bankruptcy: Emergency council will be asked to release monies for such services as foster care, counseling.

When Orange County’s bankruptcy management council convenes today, Supervisor William G. Steiner will propose that the county immediately pay private nonprofit groups $2.9 million to cover services provided before the county’s bankruptcy filing.

About 100 groups, who offer foster care for abandoned babies, court-ordered counseling and other community programs, are among the thousands of vendors owed money by the county.

“Some of (the agencies) have indicated that they can’t make payroll, that they could be closing their doors next week,” said Steiner, former director of Orange County’s home for abused and neglected children. “I’ve been told if we get a go-ahead tomorrow then the agencies will have the checks within five days--before Christmas.”

Steiner and the four other supervisors are scheduled to meet this morning to approve giving schools their shares of state money for education. Afterward, Steiner said, he will ask the new management council and the county’s bankruptcy attorney, Bruce Bennett, to approve a separate payout for the nonprofit groups.

In other developments Saturday:

* The management council--made up of Sheriff Brad Gates, Dist. Atty. Michael R. Capizzi and Health Services Agency Director Thomas Uram--met with Supervisor Gaddi H. Vasquez to discuss ways to restructure county government, including expected cutbacks. The group plans to present a report to the supervisors Tuesday.

* Bennett disclosed that he has discovered discrepancies between internal records at former Treasurer-Tax Collector Robert L. Citron’s office and the county’s trustee, Bank of America. It remains unclear whether funds were kept in separate accounts, earning different returns, as some investors were told, he said.

* State Auditor Kurt Sjoberg--whose staff is reviewing the Orange County books at the request of Gov. Pete Wilson--said regulators should clamp down on public agencies to ensure better disclosure of risks and prevent cities and schools from borrowing to invest, as several in Orange County did.

Thomas W. Hayes, the former state treasurer who is acting as the county’s chief financial adviser, spent the weekend in Sacramento preparing to testify Monday before a special state Senate committee on local investment practices that was convened in the aftermath of the Orange County bankruptcy.

Bennett spent Saturday working at his Los Angeles office, away from the “war room” at the Hall of Administration in Santa Ana where he has spent most of the past two weeks since Orange County became the largest local government in U.S. history to file for bankruptcy.

The attorney said he has discovered conflicting records about whether Citron--who resigned two weeks ago--kept segregated accounts for some of the 187 cities, schools and other agencies that had money in the county’s investment fund.

Some investors said Citron told them there was a “bond pool” separate from the commingled county investment pool, and that Citron sent them lists showing different interest rates for each pool. But Bennett said there is no documentation of separate accounts at the Bank of America, the county’s trustee for the pool.

“To the best of our knowledge, so far, there was no actual segregation of any securities,” he said. “Internally, we have found some documents that at least in the treasurer’s mind, some positions were held for particular districts or agencies. He had internal documents indicating that he was thinking of things in terms of separate accounts, but he didn’t in fact establish separate accounts.”

Bennett said he and the county’s financial advisers from Salomon Bros. are still poring through records in hopes of unraveling the discrepancies.

Jim Kenan, director of finance at the Orange County Transportation Authority, said he had believed the agency had $540 million in the bond pool, and $560 million in the higher-risk, higher-interest co-mingled pool.

The agency is the largest investor in the pool, which has plunged at least $2 billion in value--or about 27%--this year.

“I’m just shocked,” Kenan said. “Legally there should have been two pools. I don’t believe it.”

In an interview from his Northern California home Saturday, Sjoberg added his voice to the chorus of state officials who are appalled that some cities and school districts borrowed huge sums for the sole purpose of investing in the pool. “That’s risky business to say the least,” Sjoberg said. “I think that’s pretty unwise.”

A five-member team from Sjoberg’s office spent the past week in Orange County and will return Monday to continue their independent assessment of the situation. Sjoberg said he expected a report later this week.

For many key players in the ongoing fiscal fiasco, Saturday was their first day off in weeks.

“Most of us are meeting and have met 16 or 18 hours a day on these things, and it’s nice to have a breather today,” said Irvine City Manager Paul Brady, who is representing the county’s 31 cities on a committee of creditors. “We can’t keep up this pace for 15 or 20 days at a time, people are going to get real burned out, and possibly ill.”

Supervisors Thomas Riley and Steiner also said they were relaxing at home.

“I’m baby-sitting my grandchildren, which is a lot better duty than I’ve experienced the last two months,”’ Steiner said. “Ah, two weeks,” he quickly corrected himself. “It just feels like two months.”

Supervisor Harriett M. Wieder spent the afternoon in Rossmoor, where a renovated community center was being named in her honor.

Inside, 30 people enveloped her with support while a lone protester, picketed outside.

“You can’t make everybody happy,” Wieder said. “I’m just sorry, at this time of year, that people can be such grinches.”

Times staff writer David Reyes contributed to this story.