Employes in a "black vault" filled with sensitive government information at TRW headquarters in California treated security as a "joke," smuggled in peppermint schnapps inside a "classified" satchel and used a code-card destruction machine to make banana daiquiris, which they drank on duty, convicted spy Christopher Boyce told a Senate hearing yesterday.

In this atmosphere during night and weekend hours starting in 1975, he was able, at age 21, to remove or photograph secret documents concerning the operation of highly secret intelligence satellites, Boyce said. He was convicted of selling the information to Soviet agents.

TRW officials yesterday maintained that security procedures were "sound" during the period and called Boyce's charges "exaggerated." But they acknowledged that a government investigation had found "limited use of alcohol on the premises" and "poor security supervision."

"That makes me wonder how serious you've been about correcting these things," Sen. Sam Nunn (D-Ga.) said. Sen. Albert Gore Jr. (D-Tenn.) accused TRW officials of hiding behind "bureaucratese."

Boyce testified that a fellow employe used a monkey photo on his security badge and gained access to secret information. "That's still all right with you?" Gore asked.

"I've seen that badge. I find it extremely difficult to believe that badge wasused . . . ," TRW executive Paul W. Schwegler said. He said badge accountability and other security measures have been strengthened.

Boyce's security supervisor, who spent long lunch hours outdoors riding a skateboard and enlisted Boyce to spend a night helping him spy on a janitor stealing coins from a coffee fund, resigned before Boyce's arrest, and no one else was disciplined in the case, according to testimony.

The hearing concluded a three-day series based on a five-month investigation by the permanent subcommittee on investigations of the Senate Governmental Affairs Committee. The probe indicated that the system for protecting secrets is collapsing because of bureaucratic infighting, a swelling workload and lack of leadership.

Boyce, whose espionage was depicted in the book and movie "The Falcon and the Snowman," said he is helping the government because he wants to perform "a constructive act."

Convicted in 1977 on eight counts of espionage, Boyce is serving a 68-year sentence in an isolation cell in a federal prison in Marion, Ill. His espionage partner, Andrew Daulton Lee, the "Snowman," is serving a life sentence.

No matter how security is improved, Boyce said, it will not work without debunking myths glorifying the spy business as exciting, sexy and lucrative. He blamed the entertainment industry and government security briefers for portraying treason in a way that is "just what all those bored, young secretaries" with secret clearances are "dying to hear."

He said he receives mail from women with security clearances who are "thrilled" about espionage and want to be pen pals.

The truth about the spy business is "sweaty palms and shaky hands . . . and gut-gripping fear," he said. "See a lawyer, or a psychiatrist or a priest or even a reporter, but don't see a KGB agent . . . . There is no exit from espionage."

More stringent security might have deterred him, either in his security-clearance investigation or in physical security measures around the TRW facility, he said.

Sen. William S. Cohen (R-Maine), coauthor with Sen. Gary Hart (D-Colo.) of a spy novel, called Boyce's statement "one of the most powerful and poignant" made before the Senate and said no novelist "has the imagination to construct" what Boyce described. "I can't help but think we're living in a theater of the absurd," Cohen said.

In the hearing, the subcommittee had sought to pin down, as Nunn put it, "who's in charge" of "mindboggling" government security policies.

Donald J. Devine, director-designate of the Office of Personnel Management, told the panel that the attorney general, in consultation with Devine, is in charge of security policies, subject to approval by the National Security Council and the president.

The NSC has not responded for nearly a year to overhaul recommendations from an interagency task force headed by the Justice Department, according to testimony.

In testifying, Devine expressed outrage at what he called "the shambles" the system is in and said he has rectified his "mistake" in March 1980 when he approved a cutback in the investigative staff and a lessening of investigative follow-through.

Devine was criticized for recently changing rules governing background investigation procedures without consulting other executive-branch agencies as some say is required under a presidential national security directive.

One effect of the changes, according to statements from federal agencies, is that certain employes who require no security clearance now must be investigated more rigorously than others who need clearance.