Allegations of widespread overtime abuses that have sparked a federal investigation of the D.C. Youth Services Administration were detailed two years ago in letters mailed to Mayor Marion Barry's office, but Barry, who last month called the abuses "incredible," apparently did not see the letters before they were passed on to agency officials.

The warnings were contained in two letters received by Barry's office June 13 and Oct. 25, 1984, according to copies of the letters and other documents obtained by The Washington Post. The letters were sent anonymously by city employes and included copies of questionable time sheets and payroll records.

The mayor's office sent the letters to Patricia Quann, then head of the youth agency, who responded that there were no serious problems. In announcing late last month that he had accepted Quann's resignation, Barry said he was surprised by reports of overtime abuses and said they indicated "a serious lapse in management controls and in management planning."

The allegations of overtime abuses contained in the 1984 letters to Barry are part of a criminal investigation being conducted by a federal grand jury.

Last fall, investigators from the federal General Accounting Office and FBI began analyzing the more than $6 million in overtime paid at the city's three youth institutions from October 1982 to October 1985.

Investigators have verified many of the overtime abuses raised in the letters, finding that 99 of the agency's 420 employes earned more than than half of their salary in overtime. In many cases, employes were paid without signing in or out for the days worked.

The mayor's spokeswoman, Annette Samuels, said yesterday, "The mayor did not know about those letters" in which the warnings of overtime fraud were contained.

Samuels said the mayor's office followed its usual practice of not independently investigating complaints of misconduct and instead forwarded them to the youth agency, the subject of the complaint, for its response. Later yesterday, Samuels said the mayor changed this policy 18 months ago and now sends allegations of corruption to "an independent person," usually a deputy mayor, to investigate.

David Rivers, director of the Department of Human Services, which oversees the youth agency, said that in hindsight, "Obviously at this point we know it Quann's response was incorrect."

He added that the youth agency "looked in and found nothing wrong. You have to trust your supervisor that they'll take appropriate action."

Quann wrote to Rivers in a memo dated Nov. 5, 1984, that her staff was doing "an excellent job in a very difficult environment. They continue to be very short of staff and must work too many hours of overtime."

She attributed the allegations of abuses to embittered employes who have "some bad feelings and anger."

Quann declined to comment, but her attorney Roger C. Spaeder said, "Pat's response was sent up the line to higher authorities and was never followed up by anyone . . . . I think the evidence will ultimately show that she did all that could be reasonably expected of her under the circumstances."

Quann was asked to resign May 30 by D.C. City Administrator Thomas Downs after news reports of the overtime abuses and other problems within the agency.

One area under investigation by federal authorities is the central allegation made in the October 1984 letter to the mayor. According to the allegation, the acting superintendent of the Cedar Knoll juvenile facility was being paid excessive overtime payments for hours not worked.

The acting superintendent, Gwendolyn Trader, a 25-year city employe, is under investigation for allegedly collecting about $40,000 in overtime payments in the past 2 1/2 years in addition to her salary, which was about $31,000, according to sources.

City records do not support the overtime claims, according to sources who have been interviewed by investigators.

Trader has told city officialsher documentation did exist but was destroyed or lost when she was transferred in the past year from the Cedar Knoll institution in Laurel to the Receiving Home for Children in the District, according to city sources.

Trader declined to comment. Her attorney, Burton Penn, did not return repeated telephone calls from a reporter during the past week.