AUDITORS WILL SPEAK TO BOARD; EDUCATION FOUNDATION TO LOOK AT LACK OF RECORDS.

Byline: Charles F. Bostwick Daily News Staff Writer

Directors of the troubled Palmdale Education Foundation will hold a special session tonight, and accountants will explain how the nonprofit organization's records were so incomplete they couldn't perform an audit.

The foundation board is scheduled to hear from representatives of Burkey, Cox, Evans and Manning - a Lancaster-based accounting firm hired by Palmdale School District- which said in a Feb. 24 report that foundation records failed to document a majority of expenditures.

``Obviously the report has pointed out some shortfalls. We need to address those,'' said Kathleen Duren, the foundation board president.

But the board tonight will not begin the reforms or settle the status of embattled Executive Director Diana Beard-Williams, who for more than a month was barred by court order from conducting foundation business. The order, obtained in January by Duren, was lifted last week.

Those issues will have to wait until the March 11 regular meeting since a special meeting can involve only the specific business it was called to conduct - in this case, the report from the auditors, Duren said. The foundation is able at a special meeting to take action as an emergency measure, but she doubts this qualifies.

``It's difficult to predict what the board might do,'' Duren said. ``The meeting was not called to take action on the audit or on any other action. . . . I don't foresee we are up against an emergency situation. This has been going on for a couple of months.''

The firm of Burkey, Cox, Evans & Manning, which was hired by the Palmdale School District, said the foundation lacked an adopted budget, did not account for unsold event tickets, did not always count cash collections in the presence of two persons and lacked a comprehensive record of the grants it had made.

``Specifically, documentation and/or invoices supporting the majority of the expenditures was not available. Information identifying cash receipts could not be located, and material weakness in internal controls rendered the accounting system unreliable,'' the firm said.

Beard-Williams said Tuesday that records the accountants said were missing disappeared from her Palmdale School District office after she was placed on paid leave in December by Superintendent Nancy Smith.

``Nancy Smith ran that foundation. I ran the foundation the way she wanted it run. I did nothing illegal,'' Beard-Williams said.

Beard-Williams said she expects to attend tonight's board meeting.

Smith said Tuesday she removed no records from Beard-Williams' office. The auditors opened Beard-Williams' locked desk with a spare key supplied by the school district maintenance department, she said.

``Nobody took any records out of there until the audit,'' Smith said.

Foundation board member Barbara Walsh, one of Beard-Williams' supporters, said she expects that the board on March 11 will discuss ousting Duren as president as well as Beard-Williams as executive director.

Walsh said she was irritated that Duren went to court to seek an order requiring Beard-Williams to turn over foundation records, rather than appealing to the board.

``I have a real trouble with trust at this point,'' Walsh said.

Duren wouldn't comment on what might happen with Beard-Williams.

``That will be determined by the entire board, and I wouldn't want to comment one way or another.''