Columbus, Ohio, recently embarked on a technological modernization push that employs artificial intelligence in its payroll, revenue and accounting and operations systems.
Columbus Auditor Megan Kilgore said her office now uses AI for everything from reconciling differences between sets of data to visualizing city finances for the mayor or City Council members with almost real-time capability.
"We find a lot of comfort in looking at what some of the major corporations are doing," Kilgore told The Bond Buyer. "If you consider the size of Columbus, the number of transactions we have, we do look like a Fortune 1000. And so therefore, we do have to invest and employ technology that would meet those same standards."
The city of roughly 913,175 people has yet to fully integrate AI into the production of its annual comprehensive financial report, Kilgore said. But the outside auditors they work with already use it, she added.
The city's use of AI is growing. Over the past weekend, for example, the accounting and operations system Columbus uses, which is made by Microsoft, was just updated to include Copilot, a generative AI chatbot.
Kilgore and her team are also applying AI tools internally to run the department more efficiently, she said.
"It's one thing to put your financial statements in XBRL or any digital reporting language to respond to investors or bondholders," she said. "[But] we're also putting ourselves in a position of taking that data and using it to make more real-time modeling for our own management."
Meanwhile, the adoption of AI technology has enabled Kilgore's team to shift people's roles without shedding staff, the auditor and her deputy said.
"We're using our time for different things, so it's not like we're replacing people," said Deputy Auditor Darlene Wildes. "We're able to follow up on things that we may not have been able to follow up on before."
When KPMG
KPMG, which has partnered with Microsoft on the smart audit platform KPMG Clara, also found 31% of financial services firms use some form of AI in financial reporting.
When asked if GenAI will become commonly used for audits, nearly 100% of KPMG's survey respondents said it will.
The respondents labeled "AI leaders" by KPMG saw more value in having auditors use GenAI in three major areas: predictive analysis, speed of delivery and document and data gathering.
In Columbus, Kilgore said it's important to have the right safeguards in place around data: "You have to get the machinery in order before you can figure out how to use AI better," she said. "It's not just making sure that the data is accurate and responsibly used and so forth, but that it's actually going to be used for the right reasons."
Kilgore likened Columbus' approach to "bowling bumper lanes." She said they've implemented the protections necessary to ensure AI is producing genuinely good results.
"We're an income tax-driven city," she noted. "So it's really important for us to understand how our workers are working, how our economy is churning, how workforce or unemployment or all of these different metrics are actually changing. So we do use AI to make comparisons."
The city's revenue system uses AI to "sleuth through" data from many different sources, including federal and local tax filings, she said. Its payroll system uses AI for precise data visualizations of human resources trends. And its accounting and operations systems use AI to ensure correct entries and accurate recordkeeping.
As far as Kilgore is concerned, that's just the beginning.
"AI's ability to detect trends and to notice anomalies and things like that, that individuals would take a lot longer to detect, that for us is where we're aspirationally motivated right now," Kilgore said. "It's not just adding new technology for the sake of it; ... [it] actually adds significant value. And being really committed to that plan of IT governance — because once you implement it, you have to maintain it."
The KPMG report noted four in 10 of the largest companies already qualify as "leaders" in AI adoption, while less than 20% of companies with under $5 billion in revenue do.
In the world of municipal finance, smaller local governments don't have to get left behind, Kilgore said.
"We're using our resources and our deep bench of technology experts to do great things with AI," she said. "We get to then take that information and share it, via [the Government Finance Officers Association] and other channels, with governments that may only have one, two or three people in the finance office. That's the power of technology that I think is at an unparalleled moment right now: the democratization."
