Maryland and 18 other states have been notified by federal officials that they could lose matching federal funds for family aid welfare programs because they are not in full compliance with a 1981 law that tightens government spending procedures.

The states, according to the Department of Health and Human Services, are not following provisions in the budget-cutting 1981 Omnibus Budget Reconciliation Act in operating the jointly financed welfare program, Aid to Families with Dependent Children (AFDC). The $12.9 billion program provides monthly cash benefits to 11 million people.

However, a director in the federal Office of Family Assistance stressed yesterday that "no state is in danger of losing any federal funds" and that all will be given time to show they are in compliance with the law or to submit "mitigating circumstances" for why they are not.

A Maryland welfare official, acknowledging that the state has not met a reporting provision of the law, said yesterday that she expects Maryland to be in full compliance by July. The state currently spends about $200 million on its AFDC assistance, half of it provided by the federal government.

"I don't believe we're in serious danger of losing funds," said Frances Carroll, assistant director for the program in Maryland. She said the state had been notified last month by HHS's regional office in Philadelphia that Maryland recipients of AFDC funds were failing to make monthly reports of their income, as required under the law. A family of four with no other income is eligible to receive a maximum of $355 a month.

Carroll said Maryland was slow to fully implement the reporting requirements because it decided to first test them in three counties, including Prince George's, to see if aid recipients could understand the report form and if the staff could handle the increased paper work.

David Siegel, director of intergovernmental communications in HHS's Office of Family Assistance, said the notices were "purely a preliminary action" telling the states they do not appear to have implemented certain legal provisions designed to target the neediest persons and improve federal budget administration.

Siegel said different states were found not to be in compliance of different sections of the 1981 law, including provisions for enforcing new income limits on eligibility.