An internal Army investigation has confirmed that millions of dollars in surplus Defense property, from microwave ovens to video recorders, has been given away to amateur radio operators and their friends.

Defense Secretary Caspar W. Weinberger said the Army referred five criminal cases to the Justice Department, which declined prosecution.

In a letter to Rep. Joseph P. Addabbo (D-N.Y.), Weinberger said that the probe uncovered serious deficiencies in the way the Pentagon handles surplus equipment and that $16.4 million in property has been recovered. Weinberger said he has ordered corrective action that "will strengthen the procedures governing the reuse of of excess Defense property."

Addabbo's House Appropriations subcommittee on defense reported last year that Fort Sam Houston in San Antonio gave radio buffs "goody boxes" containing 11,612 kinds of surplus military items valued at $55 million. During the same two-year period, the panel said, the Army was buying more than 3,300 of the same items elsewhere.

The Army probe found that the problem is nationwide and that surplus equipment often finds its way to people who have no connection with the Military Affiliated Radio System (MARS), an emergency communications network.

The Army report said it was likely that "millions of dollars worth of U.S. government property is in the possession of private citizens." According to the report:

* A former Mississippi MARS director and his father were found to have more than $100,000 in surplus equipment at their homes.

* At Kessler Air Force Base in Mississippi, an unauthorized person was allowed to pick up two radio-teletype machines valued at more than $20,000. The borrower signed a name that was not listed as either a MARS member or a Mississippi resident, and investigators concluded the equipment was stolen.

* A MARS warehouse at Ft. Meade, Md. contains thousands of dollars in suitcases, video equipment, teletype machines, lighting equipment and construction materials, but an accurate inventory has never been taken. In one case, a MARS official improperly issued to an Army major at Ft. Meade a video cassette recorder, camera, television zoom lens and power adapter.

* One state MARS director borrowed heavy lifting equipment while he was building a house, and another MARS member who was building a house was issued an electric generator.

* MARS members frequently were provided with used cars and trailers. "This places the government in an extremely embarassing . . . situation should an accident occur involving any of this equipment," the report said.

* At Fort Sam Houston, more than $350,000 in equipment was handed out to people with no connection to MARS. In one case, a computer buff received electronic chips; in another, a forklift operator gave away a calculator and electric typewriter.

* MARS officials obtained 36,000 electronic circuit boards valued at more than $14 million. Some of them were given away as door prizes at MARS conventions, along with items ranging from batteries to bullhorns.

The prevailing attitude, the report said, was that the equipment "was no longer government property once it was issued to MARS and that MARS could do anything it wished with the property, to include giving it away."

Investigators said that in some cases it was "extremely tempting" for MARS members to employ the equipment "for personal use or commercial gain" and that "the U.S. government literally lost accountability on nearly all the property."

Investigators said they believed that in many cases "the actual value of property shipped to warehouses and individual members was exceeded by the amount it cost to ship the property."