Investment banker Evan G. Galbraith tangled with the State Department onolicy and political issues during his four years as U.S. ambassador to France, but he's now locked in a battle over spending at the embassy residence.

A department spokesman said Inspector General William C. Harrop had "raised questions" regarding the collection and use of funds connected with the residence.

Galbraith, in a telephone interview, called the controversy "peanuts" and "a lot of hooey." State Department officials said that about $15,000 is involved in two special embassy funds under review.

One fund consisted of $20-per-night fees paid by U.S. officials who used guest bedrooms in the residence. Their contributions were paid by the per diem allowance that officials receive when traveling on government business.

Galbraith said the money from this fund was used to purchase fruit and other niceties for the residence, as well as new mattresses.

The other fund was composed of contributions from U.S. business firms that used the residence for meetings. A hefty part of this money was used to purchase a set of silverware for the residence so it did not have to be rented for special occasions, according to Galbraith.

Everyone concerned seems to agree that existing guidelines covering such unusual contributions and activities need improving Department officials said more precise regulations are being drafted.