The Utah Department of Health is hoarding AIDS funds at the expense of local agencies, according to critics.

The Utah Association of Local Health Officers as well as the Utah AIDS Foundation say more state and federal money should be spent for grassroot programs.But Dr. Suzanne Dandoy, health department executive director, says there are restrictions on the allocation of federal funds - restrictions that have been explained to the association and foundation.

"What you're seeing is an internal family squabble. The current disagreement is one that has been prompted by some gaps in communica-tion on both sides," Dandoy said. "State and local health departments always have disagreements in every state. But both are important parts of the public health delivery sys-tem."

In a stinging letter, William J. Coffman, association president, says that Dandoy treats them as "wayward stepchildren." Her leadership style is based on a "condescending, offensive attitude."

"We are particularly troubled by the fact that, in spite of urgent funding needs at the local level, the state AIDS budget has consistently hoarded large year-end surpluses," wrote Coffman, who is director of the southwest health district in Cedar City. "The bloated state program is particularly offensive in light of its ineffectiveness. Surely you are aware that the AIDS program does not have a good reputation or working relationship with community-based organizations or members of the medical community."

The five-page letter to Dandoy dated Dec. 18, 1990, was authorized by the association's 12 members. Coffman said although he wrote and signed the letter, it represents the opinions of the majority of local health officers. The letter charges that Dandoy says she supports local health programs but fosters an attitude of "you against us."

"It is true that we have had difficult relations both with the community-based organizations and with local health departments over the distribution of AIDS funding," Dandoy said. "We have attempted to improve that relationship through a number of meetings and explanations but have not been totally successful. I personally have tried to be available to work out the problem with them but can only do so if they will address the issues face to face rather than writing letters."

Dandoy says what the groups don't understand is that "we do not have complete freedom in how to allocate the money given to us by the federal government." Additionally, the term "surplus" is misleading.

The federal Centers for Disease annually "takes into consideration what we have left over and builds on to our existing budget," she said.

Local health officials aren't satisfied.

While they receive mandates from the Legislature to provide more services, state funds are used to hire more state bureaucrats, Coffman said in a telephone interview. Dandoy won't allow staff members in the state's local health liaison office to work on local health issues.

"There's never been a clarity on what exactly that office does. Every time we think we can rely on them or use them for some purpose, she (Dandoy) is blown out of shape and she goes on attack. None of us are sure what exactly their roles are."

In December, Dandoy established a new Bureau on AIDS Prevention and Control "with new leadership in an attempt to be more responsive to community needs."

But several local health officials view the reorganization as "a small, positive step in the right direction."

"There have been some really serious conflicts that are not being resolved to my satisfaction," said Dr. Harry Gibbons, director, Salt Lake City/County Health Department. Gibbons wants a larger share of funding available for direct services, such as educational and prevention programs, at the local level.

So does Ben Barr, executive director of the Utah AIDS Foundation.

"If you look at where the department puts its money, it tells you what their priorities are. Their commitment certainly isn't funding community proj-ects."

According to Barr, the New Mexico AIDS Foundation, which conducts similar programs to its Utah counterpart, receives 32 percent of its funding from the New Mexico Department of Health. The Utah AIDS Foundation gets $10,000 - approximately 3 percent of its annual budget - from the state health department.

Last year the health department received $121,700 from the Legislature to provide prescription drugs for AIDS patients. Of that, approximately $70,000 was carried forward to the current year to be used for AIDS activities.

Barr wants a commitment that the money will be used for patients - not for administrative purposes. The state AIDS Advisory Committee has also recommended that the health department use the new "Ryan White" federal money to fund work on a community basis.

Barr said about $140,000 of the approximate $199,000 grant could be available to fund local projects.