"Sleep on now, Mother Corbett, God loves you," the minister intoned yesterday as a small, silent group of people in overcoats huddled around the casket in the New Samaritan Baptist Church.

The mourners -- children, uncles, aunts and a few neighborhood friends -- gathered in the plain, sparsely furnished red brick church for the services for Pauline Corbett, a 57-year-old welfare recipient who died almost two weeks ago but whose city-paid funeral and burial were delayed until yesterday by bureaucratic confusion and a hitch in the District's home rule charter.

But Pauline Corbett, a domestic worker for most of her life, is not alone. Nearly a dozen other welfare recipients and assorted wards of the city are still awaiting burial since the city's contract with W.W. Chambers Funeral Home expired Dec. 31.

A controversial "choice of undertaker" bill, passed by the D.C. City Council to replace the Chambers contract with a flat $750 funeral grant to indigent families, is stranded on Capitol Hill, undergoing congressional review. The bill is not expected to become law until late February.

In the meantime, the city signed a hastily prepared temporary contract late last week with another mortuary, Dudley Funeral Home, to handle indigent cases. Dudley buried seven indigents yesterday and Wednesday under the contract and has scheduled another 10 funerals for today and tomorrow -- all at Washington National Cemetery on Suitland Road, just east of the District line in Prince George's County.

Edward M. Dudley, owner of Dudley Funeral Home, was present throughout the service yesterday.

Dudley came under some criticism last week after the city's Department of Human Resources gave him the interim welfare funeral contract. City hall observers noted that he was chief fund-raiser for the reelection of City Council member Nadine Winter, a cosponsor of the "choice of undertaker" bill now before Congress. Dudley now appears to be jockeying to try to get a large piece of the indigent burial business when the law goes into effect.

At this time Dudley's is the only black-owned funeral home cerfied to participate in the city's special "sheltered market" program designed to provide up to 25 percent of the city's contract business to minorities. City officials say they are soliciting other funeral homes for the program.

Also, a group of competing black funeral home operators protested Mayor Marion Barry's nomination of Dudley to the city's undertaker licensing board, contending he has only an apprentice's license.

Dudley acknowledged this yesterday but said he has passed all necessary professional examinations and expects to be fully licensed soon.

"You don't make money on these [indigent] funerals," he said, noting that $300 of the $750 the city gives him for each adult funeral goes to the purchase of the burial plot. Most of the rest goes for the casket, embalming materials and labor costs, he said. He said he has seven fully licensed undertakers working for him.

As for cornering the business under the choice-of-undertaker bill, Dudley said all funeral homes will be able to register with the city, and the individual welfare family will choose the one it wants.

"I didn't do this [sign the interim contract] for the money," he said. "I did it for the love of the community."