MINNEAPOLIS (AP) _ Cocaine, marijuana and LSD were found hidden in two squad cars, along with notes asking, ''What are you looking here for?''

Police Chief Tony Bouza said he was taking the incident seriously, but there are no suspects and he has ruled out department-wide drug testing.

The drugs were found Aug. 4 when an officer accidentally dislodged the cover of his steering wheel hub and found an herbal substance and some pills.

The officer reported the incident to his supervisor and tests showed the herbs were not marijuana and that the pills were made of Ephedrine, a non- controlled substance.

Police conducted searches of other squad cars Aug. 6 and found what proved to be real drugs in the steering wheels of two reserve cars: a single LSD dosage and traces of marijuana in one car, and one-quarter gram of cocaine in another.

Police administrators say they are considering two possible scenarios: that some officers are using or dealing drugs from their squad cars; or it was a set-up to embarrass the police department or somebody in it.

Access to squad cars is not considered difficult by officers, radio technicians and mechanics, or even the general public.

Bouza said investigators do not know if the notes were written by the same person or people who concealed the drugs, but acknowledged that they apparently were written in anticipation of searches.

On Monday, officers conducted surprise searches on the department's entire fleet of marked cars.

The only suspicious items found were trace amounts of marijuana in a central garage locker and handwritten notes in the steering-wheel hubs of five different squad cars, most of them asking, ''What are you looking here for?'' Van Tassel said.

In addition, all police lockers in the Fifth Precinct were searched with the consent and cooperation of the officers, said Sgt. Phil Van Tassel. Nothing suspicious was found.

Officers' lockers normally are considered private, meaning that search warrants would have been required to inspect them without officers' permission, Van Tassel said.

''We felt that the searches were somewhat out of line in that there wasn't probable cause to go citywide with it,'' said Bruce Lindberg, police captain and president of the Minneapolis Police Federation.

Lindberg said he has contacted the union's attorney to look into the matter and determine whether any violation occurred that might lead to a union grievance.

''There was no proof that the police were involved at all,'' Lindberg said.

But Bouza said, ''It looks like there was involvement by police personnel,'' adding that the drugs were probably ''intended for use or sale'' by police.

Deputy Police Chief Patrick Farrell said it would seem illogical for police officers to conceal drugs in their cars, since they would rarely have occasion to be searched. ''There's no reason to go through that rigmarole,'' Farrell said.

Said Van Tassel: ''I want to believe the cops were set up. But I'm not so naive as to think nobody (on the force) is using drugs.''