The photo caption accompanying an article yesterday on D.C. Department of Human Services officials reversed the identifications of David Rivers, department director, and Robert Malson, acting administrator of the Youth Services Administration.

Two top officials of the D.C. Department of Human Services said yesterday they had made mistakes in monitoring the overtime and payroll practices of the troubled Youth Services Administration that resulted in possible "criminal activities."

At the same time, David Rivers, director of the department, and Audrey Rowe, the city's social services commissioner, said steps have been taken to ensure that future abuses in payroll practices do not occur and defended the agency's record in awarding contracts.

The Youth Services Administration is under investigation by the FBI, the General Accounting Office and a federal grand jury for alleged abuses of overtime and irregularities in the awarding of contracts. Patricia Quann was forced to resign as director of the agency on May 30.

"There is no question that we did make mistakes," Rowe said at a news conference. "These mistakes resulted in the opportunity for what appears to be criminal activities related to overtime pay and payroll.

"I can assure you that it is this administration's attitude that we will be happy to help provide jail cells in our already-overcrowded adult justice system to anyone guilty of these abuses," Rowe added.

Rowe said much of the excessive use of overtime by youth services employes stemmed from an unexpected surge in detentions of young offenders, beginning early last year, that forced the city to postpone plans to close the Cedar Knoll school, a minimum-security facility.

Officials said they called yesterday's news conference to respond to recent reports on the federal investigations and press criticisms of the manner in which the department had policed itself.

Rowe disputed published reports that a majority of the youth services agency's contracts had been awarded without competitive bidding. She released summaries showing that 77 percent of the dollar value of all agency contracts let in fiscal 1985 and 1986 were awarded through a sealed, competitive bidding process. However, Rivers, who is Rowe's supervisor, acknowledged some problems in the contracting area, which is a major focus of the federal probe.

"Overall the department has not done a very good job of monitoring contracts," Rivers said. He added that steps were being taken to "make sure that when we do receive a bill from a contractor that indeed we are paying for the services that we have received."

A central focus of federal investigators is overtime payments. A Department of Human Services study found that 76 percent of all overtime paid by the department was to employes of the city's three youth facilities -- Oak Hill and Cedar Knoll in Laurel and the Receiving Home for Children in Northeast Washington.

The youth services agency spent more than $6 million in overtime pay in 1982 through 1985, and employes allegedly were able to triple their salaries through the use of overtime payments. Investigators are examining cases where employes allegedly failed to work the hours for which they were paid overtime.

Rowe said yesterday that overtime payments were necessary largely to provide round-the-clock coverage for the troubled youths who pass through the city's juvenile justice system.

She said the city at one time had planned to close Cedar Knoll by July 1985 and shift its staff to the Oak Hill facility, which was understaffed. But the unexpected increase in judges ordering youths to be held before and after their trials forced officials to keep open Cedar Knoll, and the staffing of both Cedar Knoll and Oak Hill has been stretched thin.

"At the time, we had no way of knowing whether the trends Cedar Knoll was seeing last summer were temporary or not, and did not understand the surrounding factors well enough to know what response would be effective in the long run . . . . When it became apparent that the trend would continue, we began to address the long-term issues this fact presented. In spite of these efforts, a lapse occurred in our institutional controls," Rowe said.

"It appears abuse of overtime policies and procedures did occur," Rowe said. "However, it is important to understand that this overtime was necessary for the safe operation of the facilities."

Rowe said she has since adopted "more stringent controls governing the granting and authorization of overtime pay" and has been working with court officials in an attempt to seek a reduction in the number of children who must be detained in the juvenile court. Rowe also cited the agency's recent hiring of 60 employes to reduce the need for overtime in the juvenile institutions, which she said should result in an annual savings of about $1.6 million.

Both Rowe and Rivers defended their management of the youth services agency. Rowe said she was aware of allegations of overtime abuse as far back as 1980, when she asked the city administrator's office to look into suspected abuse. That investigation showed only a small amount of overtime abuse, Rowe said. She said she cracked down on employes who filed for overtime during the same weeks in which they were on vacation.

Rowe said there may be further changes in the youth services agency. She and Rivers indicated they had no plans to leave their posts.

"I don't think you need to go as far as stepping down simply because you've had some failures in your system," Rivers said. "I think we can and are willing to fix the problems that we have discovered right now."

Rowe said, "You get to a point where you say, 'What happened?' and you've got to try to understand that for yourself . . . . I think any good public servant comes forward and says, 'We made some mistakes and this is what we're going to try to do to ensure that it doesn't happen again.' "

In a related issue, Rowe said the department has extended drug counseling programs for institutionalized youths to include members of their families. The drug counseling and testing was implemented last fall.