A General Accounting Office study released this week ciriticized a Department of Energy program intended to encourage hospitals and schools to use less energy "as not an effective use of federal funds when compared to other DOE conservation programs."

But ironically, the schools and hospitals program is the only conservation program to escape the Reagan administration's budget knives.

The administration is seeking to wipe out or drastically reduce other conservation programs on the grounds that rising energy costs and income tax credits available to individuals and business are sufficient to spur conservation. The schools and hospitals program will continue at a $100 million level because, a DOE budget document said, "these grants have proved their value in financing cost-effective conservation improvements in public facilities not eligible for tax incentives."

The GAO report, however, said the program is improperly structured with most of the money going to help the institutions purchase and install equipment to cut energy use. Instead, the report argued, much more money should be made available to finance "energy audits to identify maintenance and operational changes which have no significant cost and can reduce energy use by 15 percent to 30 percent.

The report also noted that while DOE's projections of energy savings form the program ranked it 10th among all the DOE conservation programs, it got the second-largest amount of money in 1980. Most of the higher-ranking nine would be dropped under the Reagan budget.

DOE defended the schools and hospitals program, saying GAO's opinion about its cost-effectivness "is in error" because GAO failed to include the cost to individuals or firms as well as the government in implementing the other conservation programs. GAO acknowledged it did not carry out a detailed cost-effectiveness study of all the programs but rather from "the standpoint of the energy savings achieved for the [federal] funds being spent."