Jearline F. Williams, the head of the District agency that is under investigation by the mayor for its handling of deaths in group homes for the mentally retarded, is taking an extended medical leave, and sources said she will not return to her post.

A source close to Williams--who has headed the Department of Human Services since 1997--said she has received a preliminary diagnosis of colon cancer. Williams declined to be interviewed; a DHS spokeswoman said Williams, 52, is leaving "on the advice and medical supervision of her physician."

Williams's departure comes soon before the mayor's office is scheduled to release a report on the group homes debacle, which stemmed from a Washington Post report last month on the city's group home system.

The Post investigation found that far more mentally retarded wards had died in the city's care than Williams's department had previously acknowledged, and that since 1993, not a single one of the 116 deaths in homes for the mentally retarded had been investigated. In addition, a former DHS caseworker admitted to shredding documents on a problem death after The Post asked questions.

The Post report increased criticism of Williams and her agency, which already was under fire because of a range of contracting and service problems. While advocates for the retarded and some D.C. officials called for Mayor Anthony A. Williams (D) to fire Jearline Williams, the mayor publicly supported her efforts to improve the agency.

In a statement yesterday, the mayor said Jearline Williams "is a valued member of my team and I wish Jerri the very best. My wife, Diane, and I will keep Jerri in our prayers as she faces this tremendously personal challenge."

The mayor said Jearline Williams was taking a "six- to eight-week medical leave of absence from her duties."

Neither the mayor nor other officials in his administration would say whether she would resume her post after her medical leave, but government sources said she is not expected to return.

Carolyn N. Graham, the deputy mayor for children, youth and families, temporarily will head the day-to-day operations of the agency, said Peggy Armstrong, spokeswoman for the mayor.

Jearline Williams, a Parks and Recreation Department official during Marion Barry's mayoral administration and the former head of the Office on Aging, was appointed by the D.C. financial control board to head DHS in August 1997.

Last month, when confronted with the results of the Post investigation of group homes, Williams said she was personally sickened by the extent of the neglect and corruption in the group home system, and she pledged radical changes in the culture of her agency, which monitors the homes.

"The system is broken," Williams said then.

Shortly after The Post reported its findings, Williams placed the head of DHS's investigations unit, Viola Keyes, on leave as the inspector general examined charges that Keyes had ordered the shredding of dozens of files concerning the dead.

Before problems with group home deaths surfaced, Williams's department was being investigated by the Justice Department's civil rights division. That probe was sparked by earlier Post reports about widespread abuse and profiteering in group homes.

A resulting DHS internal investigation implicated yet another division of the agency--the one that handles welfare reform. A. Sue Brown, who headed that division, was fired after allegations that she steered a multimillion-dollar welfare reform contract to a company owned by D.C. dentist Arthur Stubbs, a group-home entrepreneur with whom she had business and personal ties.

Yesterday, DHS and city officials praised Jearline Williams for bringing three years of stability and administrative competence to an agency famous for chewing up and spitting out its directors.

But advocates for the poor said her frequent public statements about reform did not always result in action.

Complete Post coverage of group homes and documents gathered by The Post are available at /invisible.