A second city investigation has found no evidence of favoritism or nepotism in the hiring last year by the city government of Gladys Yeldell, the wife of suspended D. C. Department of Human Resources and Joseph P. Yeldell.

The mayor's Office of Municipal Audit and Inspection released a 12-page report yesterday, based on unsworn statements from 24 persons interviewed. It concluded there was nothing wrong with the hiring of Mrs. Yeldell on Nov. 9 as a GS-9 programs analyst in the city's personnel department.

"In spite of several occurrences discussed in this report, which tend to raise questions regarding Mrs. Yeldell's appointment," the report said, "we believe an overall anyalsis of the facts and circumstances leads to a conclusion that Mrs. Yeldell was properly selected . . ."

The investigation also concluded that a special order signed by Mayor Walter E. Washington on Nov. 2 transferring two jobs to the Personnel Department from other city agencies did not create the job for Mrs. Yeldell.

The investigation was one of six begun in the wake of newspaper allegations of nepotism and cronyism in city hiring. The Washington Star reported Nov. 18 that Mrs. Yeldell, a former employee of Washington Technical Institute, worked for the D.C. city government while two relatives of WTI working in her husband's department.

The Star later reported that the mayor had signed a special order that enable Mrs. Yeldell to obtain the job and that the funds to pay her salary were to come from the department run by her husband.

The Washington Post reported Jan. 13 that a preliminary investigation by the D.C. auditor, a City Council counterpart of the municipal auditor, found no hard evidence of impropriety but raised questions about Mrs. Yeldell's hiring. A completed report on that investigation is expected to be made public later this week.

In both audit offices' investigations, the central point to be examined was whether Mrs. Yeldell, whose husband is a long-time political ally of the mayor, had been promised the job in advance and had been hired in disregard of the city's merit personnel system.

Neither investigation was able to find anyone who would say that a prior job committment had been made. Personnel Director George R. Harrod told municipal auditors that he had talked to Mrs. Yeldell about a job in October, but there were no openings at that time. Harrod said he suggested that she contact him later, the reports says.

Mrs Yeldell nevertheless had written a letter of resignation to WTI Oct. 18, three weeks before she was hired, stating that she was leaving to "accept a position with the D.C. Department of Personnel."

According to the report released yesterday, she "had been told there were no promotion possibilities for her at WTI and she had made up her mind that she was going to be out of WTI by Nov. 1, whether she had a job or not . . . she wrote the resignation letter and 'out of sheer vanity' put down that she already had a position."

Like some previous findings by the municipal audit office, the report contained findings of fact that were contradictory.

For example, Calvin Hughes, Mrs. Yeldell's supervisor at WTI, said he had been called by the D.C. personnel office for an appraisal of Mrs. Yeldell before she resigned Nov. 1. A personnel spokesman said the appraisal call was not made until Nov. 8, after the resignation and after the job had been advertised.

Hughes also told the investigators that Mrs. Yeldell had told him that the funds for her jobs were to come from the D.C. Police Department, knowledge that would have indicated she knew in advance of the mayor's Nov. 3 job transfer orders. Mrs. Yeldell told investigator, however, that she had not discussed any job funding with Hughes.

The Nov. 3 job transfer order signed by the mayor gave the personnel department two positions to be filled with funds that previously had been allocated to the Police Department and DHR.

A third position to be funded from the Recreation Department , had initially been earmarked for inclusion in the order.That position was kept intact after the Recreation Department objected.

Personnel director Harrod said he originally had planned to use [WORD ILLEGIBLE] position to hire Mrs. Yeldell but when the the funds did not become available, he used [WORDS ILLEGIBLE] to pay her salary.

The report concluded that there was nothing special about the job transfer order. It said it was apparently not intended to create jobs for any specific individuals and neither of the positions created by it has been filed.

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In another report released Jan. 11, the municipal audit office said Yeldell [WORDS ILLEGIBLE] two relatives obtain jobs in DHR.