A special state review of the Arlington Sheriff's Department noted several faulty accounting procedures yesterday, including $1,823 missing from a fund holding inmates' money.

While the report suggested a tightening of internal accounting practices, it said there was little else to fault in the financial operations of the office and that the recommendations "are not intended as criticism" of Sheriff James A. Gondles Jr. or his personnel.

"I don't think this is that bad of an operation," said Walter J. Kucharski, the state auditor of public accounts. However, he said, the sheriff's office needs "some improvements and internal controls."

The report covered the period July 30, 1986, through April 30 of this year and reviewed four accounts directly under the sheriff's control. Those accounts are not subject to annual state audits because state funds are not involved.

Most of the problems cited in the report involved the inmate trust account, a fund that holds the money inmates have with them when they are booked into the jail. One of the three ledgers for the account could not be found, said the report. Because some refunds to inmates were made in cash, it was also difficult to reconcile the account, said the report.

The report was conducted at the request of Gondles, who has been charged with mismanagment by Ronald B. Hager, his former chief deputy and now the Republican-backed challenger for sheriff. Hager resigned the post in March to run against Gondles, a Democrat.

Both men said yesterday that their positions were vindicated by the report.

"I'm pleased with the results," said Gondles. "The report shows what I've said all along, that the Arlington sheriff's office is a professional organization that does its job properly."

While expressing concern for the missing $1,823, Gondles said the amount is "minor," considering that the inmates' account holds an average of $150,000 a year and has not been reviewed by the state for more than 20 years. Gondles added that his office is now implementing the improved financial procedures recommended by the state.

Hager said the report proves his charges. "When handling citizens' funds, no money should be unaccounted for," he said.

Hager said he stood by his allegation that Gondles requested the examination to clean up operations before the election.

A state official who declined to be identified also said election-year politics prompted Gondles' request. "My educated guess is this: Gondles didn't want any bad press," said the official.

Gondles disputed this reasoning. "Audits don't hide anything," he said. "It shows where the deficiencies are. I asked for this audit to insure the financial records for the operation of my office were in order."

Staff writer R.H. Melton contributed to this report.