DISTRICT HOLDS OFF RELEASING AUDIT RESULTS; HEAD START FUNDS SCRUTINIZED.

Byline: Karen Maeshiro Daily News Staff Writer

Los Angeles County education officials have completed their long-anticipated audit of the Palmdale School District's federally funded Head Start preschool program but are refusing to release it.

The audit, ordered in late August, was expected to determine whether any of the $6.3 million in the Head Start budget was spent on unrelated expenses and why the program ended the past fiscal year with a $900,000 surplus.

Los Angeles County Office of Education spokesman Steve Horowitz said the county mailed the audit to the district Friday and will make a presentation to board members at their meeting Wednesday.

``It's a review of the Palmdale School District. It wasn't a question of leaving it up to them (to release it),'' Horowitz said. ``We made the report. The procedure is to complete the report, (then) communicate it to the organization that's being reviewed so they have an opportunity to hear the report in its entirety.''

District trustees are scheduled to hear a report on the audit at Wednesday's meeting at 7:30 p.m. at the district office, 39139-49 10th St. E.

District officials said they would release the report after board members are briefed on the audit by county officials at the meeting.

The audit was ordered after anonymous tips surfaced alleging the improper use of funds, including that Head Start money was used to pay the salaries of people not affiliated with the program and that billing charges were improperly reversed.

At the time, Superintendent Nancy Smith said she was unaware of any Head Start money being spent on other programs or salaries unrelated to the preschool program.

She said the district did spend money for items directly related to the Head Start program, such as groundskeeping services, delivery of warehouse supplies to Head Start sites and hiring of personnel.

The size of the Palmdale Head Start program skyrocketed from 300 to 800 pupils at 10 locations over the past year, district officials said. Palmdale took on children formerly served by the Frederick Douglass Child Development Center, whose contract was terminated by the county in 1996-97.

District officials said they realized in May that the Head Start program would end the fiscal year with a budget surplus, and came up with the $900,000 estimate.

Before the fiscal year ended June 30, the district spent about $200,000 on Head Start expenses, including furniture and on salaries and benefits of people who worked for the program, leaving $700,000 to be returned to the county, district officials said.