WASHINGTON--Congress' report on the Iran-Contra affair concludes there was no evidence President Reagan knew of the diversion of Iran arms sale money but states he failed his duty to "see that the laws are faithfully executed," a Senate committee source said yesterday.

There was sharp debate among committee members about whether to include that language in the final report, due to be released tomorrow, said one source who spoke on condition of anonymity.

Ultimately it was left in the final document, although other criticism of Reagan was substantially toned down from earlier drafts, the source said.

The language is a paraphrase of the Constitution's description of the president's duties. The Constitution states that the president "shall take care that the laws be faithfully executed."

Atmosphere

The language reflects the belief of many members of the investigating panels that, even if he did not know about the diversion of arms sale profits, Reagan created an atmosphere that permitted the funneling, which may have violated the law.

The final report was to have been issued today, but last-minute checking of nearly 1000 footnotes will delay release of the report until tomorrow, members of the committees said.

With the report due to be released tomorrow, a Republican member of the House panel, Rep. William Broomfield of Michigan, said it was possible that some former Reagan administration officials violated the law in secretly selling arms to Iran and shifting the proceeds to Nicaragua's Contra rebels.

Another member, Rep. Bill McCollum, (R-Fla.), said he disagrees with the committee's majority, which he said concluded in the report that while Reagan's political appointees made errors, the system of governing that Reagan set up was not to blame.

"People did make mistakes in judgment," McCollum said in a telephone interview from his home in Florida. "But there were several significant failures in the style," he said.

House Speaker Jim Wright, (D-Tx.), told reporters he had read the executive summary of the report and believes that it is a "straight, honest, forthright declaration of the facts."

Neither Broomfield nor any of his GOP colleagues on the House panel signed the report.

Broomfield, in a separate statement to be attached to the report, said: "We should not understate the range of potential improprieties and illegalities" committed by the late CIA Director William Casey, former national security adviser John Poindexter and fired White House aide Oliver L. North, "as well as certain other governmental officials."