The mood at last week’s meeting of the Housing Authority of Southeastern Utah board of commissioners was less gloomy than previous meetings this fall and winter. Federal and consulting officials were upbeat, if not outright optimistic.

“It’s phenomenal what you’ve been able to do [in the past few weeks]. Progress is such that we will do everything we can to [keep HASU viable],” said Dave Conine, state director for USDA Rural Development, the federal agency that provides most of the funding for rural housing programs.

“I strongly recommend that you continue to work through the accounting issues,” the current HASU acting director inherited from his predecessor, Conine said, so that a new director can take over a functioning organization.

Echoing the accounting problems that have put the Grand County School District into a financial morass, HASU has a way to go before the coast is clear, but progress is being made, according to Mary Fleming, a financial management specialist with the Rural Community Assistance Corporation.

RCAC contracts with Rural Development, which assists rural communities in achieving their goals and visions “by providing training, technical assistance and access to resources,” according to its mission statement.

But RCAC plays another role that HASU board chairman Gary Jacobson said he wished he had been aware of during the last couple of years.

“You’re not just a helper,” Jacobson said as he explained that he now realizes that RCAC is really the housing regulator for Rural Development. HASU, he said, must do what RCAC wants.

The board has always been comfortable with its responsibilities to buy property and negotiate contracts with developers, home buyers, and residents who qualify to build their own, subsidized housing, Jacobson said.

But board members did not know enough about accounting practices to monitor the bookkeeping, Jacobson said, as Fleming described the steps being taken by HASU’s Interim Director Fremont Woodward, working with RCAC, to bring accounts up to date.

“There were hands doing [the bookkeeping] that did not have accounting knowledge,” Fleming said. HASU had neither a balance sheet nor a profit-and-loss statement, she said, explaining that her primary concern was cash flow.

“I have not seen anything more than incompetence,” Fleming said in response to Jacobson’s suggestion that the bookkeeping was “stupid” but not fraudulent. But she said she cannot be totally sure there was no fraud.

The problems that have not yet been worked out include a negative cash flow, including a loss of about $86,000 over the last 18 months, net of depreciation, Fleming said.

“Going back and making adjustments is a slow, laborious process,” Fleming said. She added that she is trying to provide the tools to manage cash flow, and doing her best to help HASU work out its problems.

“There are numerous bank accounts that have not been reconciled,” she said. Currently, HASU maintains about 17 or 18 accounts, she said. About $17,000 in payroll taxes has not been paid, Fleming said.

It will be another month before the HASU board will know if all the issues can be reconciled and HASU can stay in business, Fleming said.

Longtime HASU director, Karena Gholson, was terminated last month by the authority’s board of commissioners, paving the way for Woodward to take over as interim director on Nov. 12, according to Jacobson.