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The Solutions Exchange

During his tenure as the chair of the standard setting board chair, Joel Black plans to focus on evolving the organization for it to keep up with ever-changing technology and meet stakeholder needs.

By Sue Menditto

Joel Black, the new Governmental Accounting Standards Board (GASB) chair, has specialized in governmental accounting from the beginning of his career. He is passionate about the mission of government and the importance of conveying its many diverse and important activities through financial accounting and reporting.

Black wants to advance how the standard setting board can continually evolve to keep up with an ever-changing world. Central and fundamental to this ongoing and rapid change is technology. He hopes to embrace technological changes to stay in step with stakeholder needs and expectations for evaluating governmental performance and accountability.

I recently interviewed Joel Black. He discussed his background and goals, while not shying away from tough questions.

Talk about your professional background and your path to becoming GASB chair.

I’m excited and honored to be chosen to chair the GASB. I’ve spent my 28-year career serving state and local governments as an auditor with CPA firms, starting with KPMG for 12 years, and then working at Mauldin & Jenkins, a regional firm.

Although the vast majority of my experience is with state and local governments, I’ve been involved with a number of public university audits, including some of their foundations, and have consulted with several boards of regents on accounting matters. As a result, I believe that I have a feel for a number of issues that higher education faces.

Public higher education doesn’t necessarily have an understanding for the accounting and reporting matters of state and local governments. Consequently, it can trip us up when we follow projects and board conclusions, and we may not truly understand the board’s intent behind decisions. For example, at times, the new fiduciary fund requirements have confounded us. What are your thoughts on various governmental backgrounds and perspectives?

This is what makes government so interesting, there are so many services. General governments can be involved in quite a few key functions: Parks and recreation, legislation, utilities, water and sewer, public safety, transit, health care, education, and more. This wide breadth also makes government work complicated. So, grappling with issues, financial reporting, and the needs of users of financial reporting information, is really interesting. I enjoy diving into the issues and analyzing technical challenges from many different angles.

What is your favorite type of service or function in governmental finance work?

I have always found myself drawn to technical accounting issues. I’ve been part of numerous committees—most recently the AICPA State and Local Government Expert Panel and GASAC (Governmental Accounting Standards Advisory Council)—and have enjoyed conceptual and technical accounting. I like delving into the issues, and analyzing and evaluating all the challenging dimensions.

Past chairs have selected primary issues to address during their time at GASB, what are yours?

I would like the GASB to embrace the evolution of change. Those working in government are constantly dealing with and accepting change. GASB needs to evolve and take its place in this evolution.

A big part of that is understanding what varied users of financial reports need and want and ways to navigate the unprecedented pace of transformation. Bill Gates said something that resonates with me. “Most people overestimate how much change will affect them over the next two years, but underestimate how change will affect them over the next 10 years. Don’t be lulled into inaction.”

I believe that we should not settle into complacency; it’s important to pay attention and work toward that evolution. For example, a discussion that came up in July’s public testimony on communication concepts focused on how future governments will need to create bits of information. There may need to be a technical repository that allows access to data based on the type of user who accesses the information. Governments have to be cognizant of user types and their lens and become ready to respond to and translate government outcomes.

Huge accounting and reporting projects tend to use several phases of due diligence: Invitation to Comment, Preliminary Views, Exposure Drafts (ED). We’ve heard for years that by the time a project is in ED form, it’s essentially baked—even when projects only lead to one document, an ED, for public comment. NACUBO and other preparers have an impression that the board may be inflexible to feedback because of a project’s timeline.

I’m doing a lot of listening. I’ve met with all of our stakeholders and I am trying to be mindful of the feedback the community is providing.

I’m also evaluating all the various ways we reach out and communicate. I want constituents to know that they are being heard. I don’t want them to feel like they may not be listened to because it may be tough for GASB to change position or direction.

I have noticed during the past several months of my transition—from listening and being part of the process since April and formally as chair beginning July 1—that the board does discuss all dimensions of feedback. I’ve seen this and we have to help others know this.

I’m open to how we can enhance this process and enhance awareness of the process.

The FASB has full time board members. We’ve often thought that perhaps the GASB has to be a bit more rigid because its part-time board members have many external pressures. They are in demanding positions of leadership within governmental organizations and as a practical matter, time is a premium that may affect the flexibility of the board. What are your thoughts on whether GASB members will eventually become full time?

I will say that such a change would be a Financial Accounting Foundation decision. I am conscious of the need for board member nimbleness; this speaks to my objectives of paying attention to evolution.

I believe that the board has been nimble in its response and I feel strongly about the ensuring a path for this type of responsiveness. I look to GASB’s responsiveness in 2020—both before and during the ongoing COVID crisis—and we need to keep it up. For instance, in a recent series of events, NACUBO brought an issue with an implementation guide to our attention, in late 2019, and the board set into motion additional research that eventually influenced a new standard (Statement No. 97 issued June 23, 2020).

NACUBO currently does not have public liaison meetings with the full board that it did in the past, I believe these ended a decade ago. Might the board consider bringing back such meetings, even if for an hour in a virtual format?

We will think about this. On an ongoing basis, I encourage stakeholders to leverage the GASAC. NACUBO appears to do that, you’ve had some good members, especially Peggy Arrivas from the University of California System. We are leaning on the GASAC for advice.

However, we may consider something else, especially given what we’ve learned about virtual meetings. There may be some efficiencies there that can be looked into. Perhaps this new way of work can open the doors for additional communication.

Now for a question that is very important to higher education and the primary users of our financial information. What are your thoughts on financial accounting and reporting guidance synergy between FASB and GASB? Would you consider using a long-form format to explain why the boards reach different conclusions on common projects?

Throughout my career, I’ve been entrenched as a GASB expert. Recently, I’ve taken the opportunity to better understand FASB, how it works, and its reasons for reaching certain decisions.

At GASB, we try to elaborate on decisions and explain them in the “basis for conclusions.” Perhaps there could be something over and above for significant projects, such as leases. I will certainly continue to think about it.

My predecessor, Dave Vaudt, has really been an expert on extending collaborative opportunities. I want to continue his terrific example and grow it. We do want to reach out and understand our constituents and their concerns. We will do the best we can to consider what is important to all the groups that we represent. I feel strongly about continuing Vaudt’s approach of transparency, open communication, and collaboration.

SUE MENDITTO is NACUBO's senior director of accounting policy.

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