Mayor Marion Barry announced yesterday that his office has completed its investigation of the Department of Employment Services, but the agency, following allegations of apparent mismanagement and possible corruption, remains under the scrutiny of federal prosecutors.

An announcement by the mayor's office describing findings of the investigation by the city's inspector general appeared to indicate no problems in the job-training and placement agency that the mayor is not moving or has not already moved publicly to solve.

The mayor said the review begun about three months ago by Joyce Blalock, "assures me that we can identify areas of inconsistency and continue to implement corrective action."

A federal probe of DOES was touched off in July with the arrest of Clarence B. Wade Jr., 31, a private contractor engaged by DOES to run a job-training program.

He was charged with theft in connection with his alleged acquisition of more than $1,000 in household items billed to the department.

The possible scope of the inquiry was expanded later when the mayor moved to dismiss Crystal Willis and Dwayne Moore, two officials of the agency who, according to Barry, have admitted purchasing items for personal use with District funds.

In another development, city investigators said in August, according to sources, that apparently falsified reports were used to justify at least $14,000 in payments from a DOES program that compensates victims of crime.

A DOES employe identified as Eric Cox was discharged in connection with the incident, city officials said.

On Aug. 31 Barry, while Blalock's investigation -- which he ordered -- was still under way, instituted new fiscal and management controls in DOES, which he said would "provide increased monitoring and additional cross-checking for financial transactions"

A deputy said then that "we have put everybody on notice that improprieties will not be tolerated."

In addition, the mayor's statement said that one fund in DOES will be monitored regularly by the city controller and another has been transferred to the controller's office.

The full text of the report was not available last night. The mayor's statement on the inspector general's report was issued late in the day, and knowledgeable officials could not be reached.

U.S. Attorney Joseph diGenova said that his office's investigation, which involves the allegations against Willis and Moore, is continuing.