Auditing impossible on my Win2k Server

I am unable to audit anything on a Win2k member server part of a mixed NT/2000 domain with Win2K PDC. Local security settings for Auditing Object Access is Local settings:Success,Failure Effective settings:Success,Failure. Domain level Group Policy has auditing object access on. When I try to set auditing in security tab of a folder or file it says “The current Audit Policy …does not have auditing turned on…” I have enabled auditing from admin tools/security policy and from mmc Local Security Policy snapin, and from Group Policy snapin on the PDC. I am also unable to access the Active Directory from this member server, even though it logs onto the domain and shows in Net. Neighborhood. I need to AUDIT!