The Environmental Protection Agency has failed to act against tens of thousands of violations of the Safe Drinking Water Act by local water systems, the National Wildlife Federation said Thursday. ``There has been a major breakdown'' in administration of the 1974 law, said Jay Hair, executive vice president of the federation, at a news conference. The federation, whose 5 million members make it the nation's largest environmental organization, released a report of an 18-month examination of 15,000 pages of EPA computer printouts for the 1987 fiscal year that showed 36,763 water systems committing 101,588 violations of the act. The nation has over 200,000 water systems. Though the law requires that every violation be reported to customers of the system, only 5,867 notices were issued. The federation did not count failure to issue notices in its survey of violations. If it had, they would have numbered 197,309. Of the violations, said Norman Dean, federation staff lawyer and principal author of the report, 17,506 were violations of enforceable contaminant standards and the rest were monitoring and reporting violations which both he and the agency consider potentially more serious. Monitoring and reporting requirements are ``the heart of the law,'' the study said. ``They enable the identification and correction of public health risks before they blossom into crises.'' Seventy percent of the contaminant violations were for exceeding bacteriological standards, 20 percent involved inorganic chemicals or substances like metals or arsenic, 0.6 percent were organic chemicals such as pesticides, 0.9 percent were radioactivity violations, and 7.7 percent were turbidity _ sediment _ violations, according to Dean's figures. ``There's no excuse for a public water system to be distributing water that exceeds the bacteriological standards,'' said Dean, since bacteria are easily killed by cheap, well-understood chlorination. The law permits states to run drinking water protection programs approved by EPA if their standards and procedures are as tough as the federal standards. Only Indiana, Wyoming and the District of Columbia have opted to leave EPA with direct authority in those jurisdictions. Dean said a 1982 report on lax enforcement by the General Accounting Office led Congress to remove enforcement discretion from EPA in 1986, changing the statute to read that EPA ``shall'' take enforcement action against every violation if the state does not do so in 30 days. Before, the law read that EPA ``may'' act. But what action is needed is left to EPA. The maximum penalty is a fine of $25,000 a day for each violation, rarely imposed. Peter Cook, deputy director of EPA's Office of Drinking Water, said, ``All regulatory agencies must have enforcement discretion.'' When EPA finds a violation, ``It is our position that it need not be an enforcement action'' that follows. ``It's important to understand that if enforcement actions are not taken, the states are aggressive in protecting the public health'' through ``boil water'' announcements, requirements for provision of bottled water and similar measures, Cook said. Small systems _ almost two-thirds of the total serve fewer than 500 people _ may have difficulty raising money, Cook said. ``It may take some time for this community to float a loan'' to upgrade treatment systems. ``You're talking about years. It doesn't make a lot of sense, if you have a cooperative community which is moving ahead, to beat them over the head with penalties that they can't afford anyway.'' Hair said ``there is no question discretion must be used,'' but the agency must do something. ``For a first-time violator and a minor violation,'' no fine would be appropriate, Dean said. ``A simple compliance order and a public admonishment'' would suffice. ``We're not talking about calibrating the enforcement dial a little bit,'' said Hair. ``We're talking about tens of thousands of violations.'' Hair said the federation made no attempt to assess health risks to the public from the violations, but he and Dean noted that EPA had estimated that 110,000 illnesses arose in the population between 1971 and 1985 from waterborne disease, and some experts believe there may actually have been 25 times as many cases. People worried about their water may get it tested by a private lab, but a full rundown on organic and inorganic chemicals can cost more than $200, ``more than the average person should be asked to do,'' Hair said. EPA established a toll-free telephone number 15 months ago to answer question about drinking water (800-426-4791,) and Jeremy Rowland, the contractor operating it, said calls now run about 200 a day. About half come from local and state government agencies and water systems seeking information and half from the general public. Of the public callers, he estimated three quarters were worried about water quality and a quarter were people saying, ``We're overregulated and our water bills are too high.'' At the American Water Works Association, the trade association of private and publicly operated water supply systems, deputy executive director Jack Sullivan said he did not doubt the federation's figures, and also did not doubt that many violations that should have been punished were not. But Sullivan echoed Cook's comment that many systems were financially strapped. ``We're going to have to say to some of these smaller systems, `You're going to have to have financial capability, or we're going to force you into a regional system,''' something the state of Connecticut is doing, Sullivan said.