An estimated $121,000 worth of medicine and drugs purchased by the District of Columbia government had to be thrown away during the last two years because they remained on city warehouse shelves so long that they no longer were effective, according to an internal city government report.

The report, prepared by the city's Department of Environmental Services, is sharply critical of the way the Department of Human Resources buys, stores and distributes drugs and medications to the city's clinics, hospitals and nursing homes.

"Approximately 15 percent of the annual inventory for 1977 and 1978, and approximately 5 percent [thus far] for 1979" was ordered destroyed by inspectors from the environmental services department's environmental health branch, the report said. Some of the drugs had been in the central DHR warehouse for as long as five years, according to the report, which was obtained by The Washington Post through the Freedom of Information Act.

According to Environmental Services sources, some of the outdated drugs could have been returned to their manufacturers for refunds if DHR had paid attention to expiration dates. The sources could not estimate how much of the $121,000 could have been saved in refunds.

The report notes that no one individual within DHR is responsible for overseeing all phases of the department's drug purchases and distribution operations and that, as a result, those operations are splintered and disorganized.

The DHR central warehouse at 675 Taylor St. NE overstocks some items and fails to order enough quantities of frequently used drugs, according to the report.

The inspectors found that there is a "lack of professional expertise pertinent to brand name and generic drugs, pharmacy law regarding registration, record-keeping procedures, security systems, accountability and disposal procedures."

The report states that the inspectors also learned that there often are long delays between the time a city public health clinic - one of the facilities that provides the primary medical care for Washington's poor - requests a supply of drugs and the time the drugs arrive from the warehouse.

In addition, the report said, some drugs are stored in unsanitary conditions and record keeping is inadequate. The report also stated that large quantities of drugs are purchased from suppliers with "long records of inadequate services."

For example, the report said, there were discrepancies in shipment reports and in shipment confirmations; freight loss and damage; receipt of unsatisfactory supplies; receipt of unqualified substitutions; refusal to accept return items or give credit, and long delays in receipt of drug orders.

In a formal response to the six-page report, DHR director Albert P. Russo acknowledged the existence of most of the problems and said DHR is trying to improve its procedures.

The DES report follows by less than a month a report in which DES inspectors said they found similar drug problems in the city's public health clinics-also run by DHR-and additionally found the clinics to be filthy, roach- and mouse-infested facilities with numerous health and safety problems.

The report on outdated drugs states that it is impossible to determine precisely what portion of the more than $121,000 worth of drugs that were destroyed was stored by DHR and what portion was stored by D.C. General Hospital.

Until mid-1978, DHR and the city hospital shared record keeping and storage facilities, although the hospital was made independent from DHR in mid-1977. Since then, the hospital has been controlled by an independent commission appointed by the mayor.

The Environmental Services report makes the following recommendations for improving DHR's pharmacy operations:

"Stock" items - such as some standard antibiotics-should be stored separately from "nonstock" items so that inventory levels can be easily reviewed.

The purchasing system should be revised to find the most reliable, inexpensive suppliers of drugs and medications.

The stock should be rotated so the first items into the warehouse are also the first sent to the clinics, thus ensuring that medications do not become outdated on warehouse shelves.

A housekeeping program should be instituted to "ensure that all items are maintained in an environmentally clean and sanitary manner to reduce the opportunity for contamination and adulteration of the products.

That central management be established and a properly trained staff be used to run the pharmacy program.

According to the report, $106,000 worth of drugs were disposed of in 1977 and an undetermined amount of narcotic medication was sent to the U.S. Drug Enforcement Administration for disposal.

Additionally, more than $15,000 worth of drugs had to be thrown away in 1978. The report estimates that another $3.600 worth of drugs still have to be destroyed.

In his response to the report, Russo said he has appointed George L. Jenkins, chief of DHR's Material Support and Contracts Division, to supervise the drug program.

Russo also said "the department is proceeding to secure the services of a qualified pharmacist on an interim contract basis . . . [to] provide the needed expertise, surveillance, and assistance to department units and activities that require pharmaceutical supplies."

Additionally, the DHR director said he is establishing a Pharmaceutical Review Board and invited Environmental Services Director Herbert Tucker to "appoint a member from your department to serve on this board." CAPTION: Picture, ALBERT P. RUSSO . . . trying to improve procedures