LOS ANGELES: Community advocates and labor unions in California are gearing up for a fight over a scarcely noticed proposal in Gov. Pete Wilson's welfare reform plan which would privatize some aspects of welfare administration. The Wilson plan, which would subcontract responsibility for screening welfare recipients and other functions to private corporations and charities, may have broad implications as other states look for ways of streamlining their welfare programs. Private contractors in California already do some welfare administration, such as bookkeeping, collection of delinquent child support payments and computerized record-keeping. If approved, the reform plan would give them the chance to bid on many jobs now performed primarily by state and county workers. While many county officials feel the effort could move more people off welfare, critics fear the new folks in charge will not have the interests of the needy at heart. Anne Arnesan, director of the Council on Children and Families in Wisconsin, which is currently implementing a similar plan, worries about ômaking a profit on the backs of the poor.ö Some California counties have tested the concept. Orange County, for example, divided its welfare responsibilities between government welfare staffers and a private corporation in an effort to determine which method is more efficient. The results were somewhat surprising, considering that the private sector might be expected to be better at placing workers in business. County workers won the competition, moving 3,679 people off welfare, compared to 2,473 for the private corporation.