Federal prosecutors have revived a long-dormant investigation of the D.C. Youth Services Administration, presenting evidence to a grand jury that a former juvenile facility director allegedly defrauded the government of thousands of dollars in overtime pay, according to sources familiar with the probe.

Authorities began calling witnesses before a grand jury about a month ago after repeated, unsuccessful attempts to gain the cooperation of the official, Gwendolyn Trader, in answering questions about Patricia Quann, former administrator of the agency, sources said.

Prosecutors had hoped to ask Trader whether Quann and Milton Douglas, Quann's deputy, knowingly approved false time cards for Trader, sources said. As acting head of the minimum security Cedar Knoll institution, Trader collected between $40,000 and $50,000 in overtime during a 2 1/2-year period ending in late 1985, sources said.

About eight witnesses, mostly former or current Cedar Knoll employes, are expected to testify before the grand jury. Trader's former secretary, Audrey Furr, said she testified last month that she believes Trader worked past her regular hours on "many, many nights."

The federal probe began in early 1986 after the U.S. General Accounting Office uncovered widespread overtime abuses potentially involving as many as 112 employes of the youth agency, a division of the Department of Human Services. Investigators narrowed the inquiry to a few high-ranking officials, then dropped it for about eight months while manpower was diverted to an unrelated FBI undercover probe of D.C. contracting, sources said.

The investigation apparently was waylaid not only by the undercover probe, which ended in May, but also by objections by City Administrator Thomas M. Downs that the GAO was overstepping its authority in helping conduct the inquiry, sources said.

Trader, now a special assistant at the youth agency, said this week, "I don't have anything to really say about the subject."

Quann, who was fired in May 1986 as head of the youth agency, declined to comment. In a 1984 memo to David E. Rivers, then human services director, Quann said, "I am aware of the extra hours she {Trader} works from numerous conversations I've had with her during all hours of the day and night."

Douglas did not return phone calls to his office.

Another former youth services official under investigation, Leslie R. Cooper, could not be reached for comment. Sources said that authorities are investigating allegations that Cooper, who retired in August as a $31,980 supervisor at the maximum security Oak Hill juvenile facility, collected pay for hours he did not work.

Sources said that Trader's city pay records show that she put in an average of about 30 hours of overtime a week as acting superintendent of Cedar Knoll.

The records show Trader collected overtime pay while she was on annual leave, according to a knowledgeable source. Incident reports also show that Cedar Knoll employes were unable to locate Trader to notify her of escapes or fights on nights when she collected pay for working at the institution, the source said.

In an interview with investigators, one youth services official quoted Trader as saying she had an agreement with Quann to collect overtime in lieu of a salary increase for the job of acting superintendent, one source said.

Trader was making between $32,369 and $34,856 at the time she took charge of the institution, city records show. Youth services officials apparently were unable to approve a salary increase because Cedar Knoll was expected to close.

Furr, who testified on Nov. 19, said she was aware of Trader's nighttime hours to an extent because Furr worked overtime as an escort on buses carrying offenders from court or as a "control clerk" at the facility.

"Many a time when the bus came back at 6:30, sometimes at 8, there was light on in her office," she said.

Otis Holley, a Cedar Knoll counselor who worked the evening shift from 2:30 to 11 p.m., said he is scheduled to testify today, but declined to comment about what he would say.

The GAO initially found some employes of the youth agency were doubling or tripling their salaries with overtime pay. City officials later said more than 99 employes of the youth agency received enough overtime to increase their base salaries by more than 50 percent in 1985.

Mayor Marion Barry called the overtime "incredible" and ordered a report from the city's auditor, Coopers & Lybrand. Charles Seigel, a spokesman for the human services agency, said yesterday the report had been turned in and "its recommendations followed," but said he could not give further details until today.