Because controls are inadequate, District of Columbia agencies often violate budget laws by making large "back door" transfers of funds between accounts, D.C. Auditor Matthew S. Watson reported this week.

In the 1977 budget year, Watson said, seven of 15 agencies checked were found to have overrun some of their accounts by nearly $5.9 million. They did not actually overspend their total budgets, but made up the excess payments in some accounts by underspending on others.

This represented "major shiftings of agency priorities" without legislative sanction, Watson said.

"In general, we found that funds appropriated for direct public service were used instead to pay administrative costs," Watson reported to the City Council. A council member made the report available to a reporter.

By law and a mayoral order, all transfers of more than $25,000 between certain accounts must be submitted to Congress for approval, Watson said. Congress reviews and enacts the city's annual budgets.

Watson blamed the city's Office of Budget and Management Systems for not adequately monitoring the way the budget is carried out once it is enacted. But he pointed out that the budget office is badly understaffed.

Comer S. Coppie, the city budget director, took issue in a memorandum to Watson with the auditor's finding that budget laws are being violated by the shifts. He said a new budget system, now being established, will make it easier to control spending patterns.

Coppie also strongly denied that the transfers are an "abuse" of the budget system, saying that only 0.5 percent of the city's 1977 budget was involved and some of the "overruns" were really technical accounting adjustments.

Watson said the largest total overrun. $2.2 million, was in the Department of Human Resources, which transferred funds from mental health, welfare and social rehabilitation programs to administration.

Of that money, Watson said, $1 million had been earmarked for Forest Haven, the city's home for the mentally retarded near Laurel. The facility has come under widespread criticism for inadequate facilities and staffing.

The second largest overrun was in the Police Department, where $1.7 million was transferred from one category to another. The transferral was made to carry out a staff reorganization which was done without the necessary approval of the mayor and council, Watson said.

Watson said the public library shifted $153,700 from public service in order to pay higher wages to employes.