After more than 24 years of working in governmental accounting, budgeting, and management, Michele began her position as GFOA’s new technical services director on October 30, 2017, replacing long-time director Stephen Gauthier upon his retirement. Michele is a familiar face to GFOA as she is a past chair of GFOA’s Committee on Accounting, Auditing, and Financial Reporting (CAAFR). She has also been a frequent conference speaker and has contributed to GFOA’s communications with the Governmental Accounting Standards Board (GASB). Michele is also a past president of the New York State GFOA. She was most recently the deputy comptroller for accountancy in the City of New York, where she previously served as an associate director of the Office of Management and Budget. Michele is a CPA (named the 2011 Outstanding CPA in Government by the New York State Society of CPAs) and a founding member of the CPA Journal Editorial Board; she has also served on committees of the American Institute of Certified Public Accountants.
Now, we sit down with Michele to talk about serving GFOA’s more than 19,100 members, and the government finance profession.
Stephen Gauthier was well-respected and revered among the GFOA staff, membership, and government finance community. (See below for more on Stephen.) How do you plan to build on his legacy?
Over the years I’ve have had the great pleasure of working with Stephen through GFOA’s CAAFR; we’ve served together on some GASB taskforces; and he even asked me to review some of his publications. And, of course, I never missed an opportunity to hear him teach. No one is more in awe than I am by his mastery of governmental accounting and his wizardry in explaining the most detailed, complex concepts with humorous analogies that anyone can immediately grasp. I hope just a tiny bit of his magic may have rubbed off on me.
Prior to your role as chief accountant and deputy comptroller for accountancy for the City of New York, you served as an associate director of accounting services for the New York City Office of Management and Budget and comptroller of six public authorities and local development corporations. What attracted you to a career in government finance? Did you start in the profession upon graduation from school?
I chose accounting as a field pretty early on – in high school, I took two classes in bookkeeping, thinking it was a skill I could use to earn money while I was in college. It seemed so logical and like a great way to understand a business that I decided to continue into accounting. Also, both of my grandfathers had been accountants, and my grandmother was a bookkeeper (back in the day when accounting was “men’s work”), so you might say it’s in my blood. After college, I worked in a big accounting firm for two years and found that I really felt good about working with and helping my government and non-profit clients. So, I went to graduate school for public administration and landed my first public-sector job as a financial analyst for the New York City Council. After that, I moved onto the other roles you’ve mentioned.
How has the government finance profession changed throughout the years?
I think the understanding of how important financial accounting and reporting is to government transparency and accountability has really grown. A great case in point is accounting for postemployment benefits. Funding-based reporting for pension and retiree health insurance made a lot of sense to me – and I think to many others within government – because it followed the logic of how governments actually manage and pay for these benefits. Unfortunately, it seems that it may have been obscuring long-term obligations because the information was reported so differently in the private sector. I’m a big believer that there are aspects of government that are just fundamentally different from other kinds of organizations and warrant differences in reporting, but if financially literate readers cannot find the information they need to judge the financial health of their government, that’s a real problem in a democracy.
Why and how did you first get started in GFOA? Do you have any advice to current members and potential members?
I was very lucky that an academic advisor in graduate school had told me about GFOA, as he was active in both the national and the New York State associations. The New York State GFOA awarded me a scholarship and invited me to their annual conference. I was just blown away by the caliber and public service commitment of the people I met there, including the president of the association that year, Bud Larson, for whom I later worked for in New York City for many years. When New York City was concerned about some of the proposals in a GASB invitation to comment – on what later became GASB 34 – Bud arranged for me to testify at a hearing that was being held in conjunction with a national GFOA conference. Of course, since I was going to be there already, it only made sense for me to attend the conference. Wow! I was so impressed; I knew I wanted to be involved after that experience. My advice is to jump in – you won’t find a better way of growing your expertise, recognition, or career.
The City of New York has won GFOA’s Certificate of Achievement for Excellence in Financial Reporting for 37 consecutive years and, additionally under your leadership, was awarded GFOA’s Popular Annual Financial Report. Why do you think it is important when participating in GFOA’s awards programs?
I think financial reporting is a cornerstone of a functioning democracy. Every taxpayer and citizen has a right to know how public funds are used, and what commitments have been made for the future. GFOA’s award programs set high bars for reporting. Whether it’s for a full CAFR that lays out all the details in accordance with generally accepted accounting principles (GAAP) or for a PAFR that synthesizes all that complexity into inviting and accessible reports for non-experts, GFOA certificates let governments know that they’re meeting high standards for transparency, and lets readers know that they’re receiving top-notch financial reporting.
As a GFOA trainer, what type of training do you think would be most beneficial to GFOA members?
I think we provide a great selection of classes for folks new to government who are transitioning from other accounting specialties, as well as some intermediate and advanced classes delving into more complicated topics. And, of course, since government accounting, auditing, and financial reporting are always developing, we constantly offer opportunities for those in the field to stay current, such as our annual GAAP Update and annual conference sessions. I think we have some opportunities to add topics, such as accounting for specialized governmental entities or grant accounting.
Describe your role as past chair of GFOA’s Committee on Accounting, Auditing, and Financial Reporting (CAAFR).
The CAAFR prepared several best practices and advisories, including on internal control, technology, and grant management. We also provided feedback to GASB for several due process documents on various projects, and had some notable effects on some of their standards. We initiated efforts that were continued by GFOA for many years, which have led to some of the positive change we’ve seen in recent years. An example would be GASB 76’s changes to the GAAP hierarchy that resulted in the full exposure of implementation guides. In the past, these publications – often the sole source of specific and detailed guidance on practical aspects of GASB standards – were shared only with a handful of experts selected by GASB staff before they were cleared by the Board. That resulted in some surprises for preparers and others when guides were issued and in some cases, and some opinions, guidance that seemed to venture into territory beyond what was covered by the original standards. For me, serving as Vice-Chair and then Chair were wonderful opportunities to develop leadership skills and get to know more about the workings of GFOA.
In this position, what do you see as the biggest challenges for GFOA’s Technical Services Center (TSC)?
I see the biggest challenges as being related to change. Stephen Gauthier was the backbone of the TSC for a very long time and he is like a force of nature in our field. We’re going to work to continue to provide GFOA’s membership with high-quality publications, training opportunities, and recognition for outstanding achievements. Stephen is a tough act to follow, but I feel confident that GFOA’s staff and team of trainers and reviewers are up to the task.
What are your goals for your new position?
I want to do a lot of listening to fully understand the needs of our members. I would like to make even better use of technology and help our members to do the same. GFOA’s web-based training has taken off in recent years, and I think we can build on that, such as by offering some longer online classes. I think there might be opportunities to automate some aspects of our award programs application and administration processes, and new technologies, such as artificial intelligence applications and machine readable reporting, might be worth exploring as they develop further. For keeping members updated on publications, a subscription service might be worth exploring. Most importantly, I want to make sure we continue to find more ways to leverage the enormous expertise and public service devotion of our members and staff, as they are the bedrock of everything we do.
What is your greatest community achievement?
All of my proudest moments were the result of lots of teamwork. Even those where I feel I played the largest parts in, I know the credit goes to my mentors and teachers, to my colleagues, and of course to my family. I’m really proud of reporting changes that I championed when I was with New York City, which I deeply believe improved the transparency of the City’s CAFR. The PAFR that we introduced in the City – to which I provided mainly the initiative to make happen – is another achievement that I feel very good about. I particularly loved that the Comptroller – who is an elected official in New York City – received great feedback on publishing the PAFR and that it resulted in my staff receiving recognition and praise for their work. I love seeing some of my suggestions included in GASB standards or Q&A guides, and there is even one or two of my contributions that I can see in Stephen Gauthier’s publications. That’s the greatest feeling for me – when my ideas or suggestions are adopted by people for whom I have such a deep respect.
Please join us in welcoming Michele and be sure to say “hello" when you see her at upcoming GFOA training events and the annual conference.
Stephen Gauthier Retires
Stephen Gauthier retired in January 2017. He had served as director of GFOA’s Technical Service Center and had is icon to many in the accounting, auditing, and financial reporting area. He is a well-known instructor to tens of thousands of participants, author of numerous GFOA publications (including Governmental Accounting, Auditing, and Financial Reporting (commonly known as “GAAFR” or the “Blue Book”), and was a member of GFOA’s staff for 29 years. He was responsible for GFOA’s member services involving accounting, auditing, and financial reporting, which included performing technical reviews of almost 6,000 financial reports and budgets of state and local governments submitted each year to GFOA’s professional recognition programs. Gauthier was the editor of GFOA’s governmental accounting, auditing, and financial reporting newsletter, GAAFR Review, and was a regular contributor to GFOA’s magazine, Government Finance Review. He was also the lead staff for GFOA’s Committee on Accounting, Auditing, and Financial Reporting.
Before joining GFOA, Gauthier worked as the research and technical review manager for the Tennessee Division of State Audit in Nashville. He was one of the original members of the Special Review Executive Committee for GFOA’s Certificate of Achievement for Excellence in Financial Reporting Program. He also served as observer to the Governmental Accounting Standards Board on behalf of the National Association of State Auditors, Comptrollers, and Treasurers.