Auditors hired by the D.C. government have questioned the expenditure of $41,786 in federal job training funds by Youth Pride, Inc., including $9,624 spent for rental car fees and $6,455 for landscaping.

Jack Martin and Co., an independent firm, examined Pride's administration of a $1.3 million grant in 1977 and reported that the organization's financial records were "not reliably maintained" during that year, and that its "accounting and administrative procedures do not conform to federal regulations."

The audit, commissioned by the D.C. Department of Employment Services, was completed two weeks ago but city officials have refused to release it. A copy was obtained from other sources by The Washington Post. r

Youth Pride Inc., a self-help group formed 13 years ago to provide job training for disadvantaged minorties, and its related organizations are currently under federal grand jury investigation.

Federal prosecutors are specifically looking at whether three officials of P.I. Properties, Inc., a real estate spinoff of Youth Pride, stole hundreds of thousands of dollars from the government and low-income tenants while running the Clifton Terrance Apartments.

The investigation, which began after The Washington Post reported last October that officials of P.I. stole, misappropriated or diverted some $600,000 during four years at Clifton Terrace, has since been broadened to include financial transactions at Youth Pride.

Prosecutors have so far uncovered about 250 bank accounts, including those of Youth Pride, P.I. Properties and several other ventures, and are attempting to track money that passed through them, according to informed sources.

The three officials named in the Post articles were Pride executive director Mary Treadwell, her sister Joan Booth and former property manager Robert E. Lee Jr. Treadwell has denied all wrongdoing, Lee declined to discuss specifics and Booth declined to be interviewed.

The recently completed private audit of Youth Pride records questioned many expenditures because they had not been authorized by the city government, through which the job training grant was channeled, or because they were not supported by documentation.

One of the largest amounts questioned was $6,455 for landscaping expenses. Those checks were made out to Pride Economic Enterprises, a sister corporation also headed by Treadwell.

The audit report does not specify what kind of landscaping might have been done. Nor does it detail why $9,624.23 might have been needed to rent cars as part of a job training project for disadvantaged youths.

It is the responsiblity of the city to allow or disallow the questioned expenditures. A city official said yesterday there was no timetable to do this.

Treadwell said yesterday that she was "very pleased" with the audit. She said that $41,000 in questioned costs "is considered excellent" because it is comparatively low, considering the contract was for $1.3 million.

She said she was sure "98 to 100 percent" of the questioned costs "can be cleared up" when she meets with city officials and provides additional documentation.

Treadwell would not comment on the rental cars, landscaping of other details in the audit. "I'm not interested in getting into specifics of the audit report" with The Post, she said.

The Martin auditors, in sifting through Youth Pride's records, said they found a "lack of adequate documentation to provide a reliable audit trail", and that generally the records they could locate showed "a seeming lack of familiarity with all necessary federal regulation."

Treadwell said she has been made aware of these problems since the contract expired and has corrected them.

A review of Youth Pride's records since the organization began receiving government money in 1967 indicates that year after year, federal and city officials have criticized Youth Pride for failure to keep adequate records. To date the organization has received some $21 million from the U.S. Department of Labor for job training, and currently has a $1 million contract.

Treadwell said yesterday she is unaware of any recurring complaints of accounting deficiencies.

The city's interest in auditing Youth Pride's 1977 contract stemmed from an on-site visit to the organizations' headquarters at 1536 U St. NW in mid-1978. At that time, city labor officials were concerned about apparent discrepancies in financial reports filed by Treadwell.

Their field visit raised a number of questions which were filed in a city labor department memorandum dated July 21, 1978. Among the questioned expenditures were "large payments" to a Youth Pride-related organization for landscaping, "numerous payments for coffee service, flowers, fruit baskets, etc.," $1,085 for entertainment and catering at Youth Pride open houses, $1,785 for 1978 calendars and "various large expenditures . . . which appear to be unnecessary."

The memorandum, written by James Pfiester, recommended an immediate audit. As a result the city withheld some $50,000 in payments to Youth Pride. But an audit was not commissioned until 18 months later.

Of the $220 million disbursed in the last six years from the federal government through the city's labor department to private contractors like Youth Pride, only about 10 percent has been audited. About $1 million in expenditrues has been questioned by auditors. But none of those dubious payments has ever been ruled on by the city, even though many of them are years old, according to federal officials.

A D.C. Department of Employment Services spokesman, asked for comment at noon yesterday, said the department would need more time to respond.