A consumer committee is misusing state money by paying two contractors as if they were full-time employees, state Department of Commerce Director Dave Buhler said.

But the committee's chairman said the committee's independence is at stake. However, he said the contracts may be rewritten to conform to the letter of the rules.The quiet controversy, with neither side claiming to be angry at the other, centers on Tim Funk and Lisa Hurtado. The Committee of Consumer Services, an extension of the Public Service Commission, contracted with both of them to satisfy concerns a legislative auditor had in 1984.

Funk's duties include publicizing the committee's activities, and Hurtado provides legal assistance. Funk's contract started in 1985. Hurtado's began a year later.

They are paid a combined $60,000 from the professional and technical account, which was established so the committee could contract with utility experts for help with issues. Both are paid only for the hours they work, and both consistently work 40-hour weeks and have offices in the state's Heber Wells building.

"My credibility is on the line," said Buhler, Gov. Norm Bangerter's 1988 campaign director who took over the department in January. "I've got an obligation if I think something's not being done right to correct it."

Buhler said he lobbied legislators for an increase in the account this year, not knowing some of the money was being spent on the two contractors. He said Funk and Hurtado are essentially state employees, and the Internal Revenue Service requires all employees to be on the payroll.

But committee chairman Felshaw King said the committee has an obligation to remain independent of the state so it can represent state residents on utility issues. He questions whether Buhler has the authority to cancel the contracts.

"I'm not suggesting Mr. Buhler is trying to erode the independence of this committee, but this could have long-range effects," King said, noting the move could lead future department directors to cancel other committee contracts.

Buhler is sensitive to the need for an independent committee. The trouble is he has to give final approval to the contract payments. He does not question whether Funk and Hurtado perform their duties well or whether the committee needs them.

He sent a letter to State Finance Director Gordon Crabtree, who agreed the two contractors belong on the regular payroll.

"If the committee had the money to hire them as full-time employees, that would be fine," Buhler said. "But they don't. The contracts would have to be for specific projects and have a time limit. They should be given no specific office space."

Buhler has given the committee until Thursday to rewrite the contracts. Otherwise, Funk and Hurtado no longer will be paid. However, the deadline already has been extended once and may be extended again. Buhler is waiting for an informal opinion on the matter from the Utah attor