WASHINGTON -- The Maryland Water Quality Financing Administration has indefinitely postponed plans for two bond issues in the wake of a criminal investigation into possible theft from the administration's revolving loan accounts.

Michael Sullivan, a spokesman for the Maryland Department of the Environment, said the apparent theft of about $1.2 million from the water administration's loan accounts during 1992 and 1993 should have no impact on the $129.6 million of revenue bonds the administration has outstanding.

"At this time -- I have to stress that -- at this time, we are confident that we have adequate funds to meet all our debt obligations," Sullivan said.

In a statement released yesterday, Maryland Environment Secretary David A.C. Carroll said, "I am confident that the WQFA will meet its obligations to its bondholders and borrowers."

Sullivan said officials decided to hold off on a $45 million refunding and a $45 million new-money bond issue planned for the fall because "there's uncertainty about the scope of this entire situation.

"We'll move as quickly as we can to get this behind us and get back into the bond market," Sullivan said.

Earlier in the year, the Maryland Board of Public Works authorized the water quality administration to sell bonds after Oct. 15. But internal controls at the administration brought the account problem to the attention of officials in late August. The matter was referred to the environment department's internal audit division. The state attorney general's office also was notified and is conducting a criminal investigation.

Sullivan said no firm dates were set for the bond sales, but noted that by Oct. 15, the department's investigation already was under way.

Carroll said the exact dates and amounts of the suspected withdrawals are part and parcel of the investigation, which he announced yesterday.

Department officials declined to comment on how the apparent theft was carried out or whether they suspect an inside job. "We can't comment on that because it's part of an ongoing criminal investigation," Sullivan said.

But in a statement announcing the investigation, the department said that although no charges have been brought to date, one department employee has been suspended pending the inquiry's outcome.

The Water Quality Financing Administration was created by the Maryland General Assembly in 1988 as part of a state effort to clean the Chesapeake Bay and its tributaries.

The administration issues bonds, the proceeds of which are pooled with federal and state grant funds to form a revolving loan fund. The administration makes low-interest loans to localities for water quality improvement projects.

Carroll said officials "will work aggressively" to get the loan program running full speed. "The WQFA will continue to honor existing loans and prepare to sell bonds and make new

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