AI's Bold New Role in Federal Budgeting

As federal commercial-off-the-shelf budgeting software evolves, the integration of generative Artificial Intelligence (AI) is unlocking new possibilities that stretch far beyond traditional methods, fundamentally changing how agencies manage their budget and planning processes. A new era of faster-paced decision-making with shortened suspense dates due to the Office of Management and Budget (OMB) and Congress necessitates adopting technological innovation. Generative AI alleviates the pressure of delivering timely, accurate, and complete budget data requests on budgeteers.

Let's explore how generative AI embedded into government budgeting software enhances essential functions, making agencies more effective and responsive to key stakeholders throughout the budget process.

From Tedious to Transformative

Budget formulation requires meticulous attention to detail and a deep understanding of an agency’s strategic priorities. Formulation can be a struggle when overlaid with a mentality that formulation is sometimes considered “other duties-as-assigned” or “a game of make-believe.” Generative AI transforms this process by automating the creation of the hundred-plus-page budget proposals. Additionally, by analyzing past budgets, including spending and staffing patterns, current priorities, and issue papers, AI generates faster, complete budget justifications more accurately and strategically aligned with the agency’s performance framework.

For example, generative AI quickly identifies areas where costs can be reduced without compromising critical mission areas when compiling impacts to multiple funding scenarios due to expected budget cuts. This AI-driven insight allows agencies to remain hyper-focused on mission delivery even under financial exigencies, offering proactive precision and strategic foresight that manual methods could never match.

“What-if” AI Could Do That

The ability to run "what-if" analyses is crucial for effective federal budgeting and planning software. This process allows agencies to explore different scenarios and assess their potential impacts on budget and performance. Generative AI enhances this capability by automating the generation and evaluation of multiple "what-if" scenarios based on proven past performance (enacted budgets), including the use of configurable decision-making criteria. By factoring in numerous variables, AI provides deeper insights into how decisions affect budgets and outcomes, enabling more informed strategic choices.

Generative AI doesn’t just analyze a single year’s outlay; it simulates the program investment's long-term impact, accounting for factors such as maintenance and expected returns, and even considers historic outlay patterns from similarly executed programs. This comprehensive analysis helps agencies refine their cost-benefit analysis, ensuring a fulsome Alternatives of Analysis (AoA). Decision-making alignment across the stakeholder community occurs more naturally when both short-term needs and long-term strategies are contemplated simultaneously.

Real-Time Adaptation

Each year, the burgeoning spring starts with the creation of the next year’s federal budget submission. The challenge lies in its execution and the ability to adjust as circumstances change…eighteen months later. After all, part of a budgeteer's job is to find funds to offset the unexpected. Generative AI excels in this area by continuously monitoring financial information and providing real-time recommendations for adjustments. If specific projects are underperforming or overperforming, AI, in conjunction with the Technology Business Management (TBM) framework, can suggest reallocations to ensure scarce resources are used most effectively.

During mid-year reviews, AI can propose reprogramming and transfers of funds to higher-priority programs. Imagine if, in a fishbowl meeting with the budget team, a decision is made on a recommendation to execute a transfer. Generative AI creates the proposed spend plans, updates the operating plans for Congressional correspondence, and notifies the impending bureaus of the change. This is a meaningful addition to the quiver of tools budgeteers must maintain to be efficient program administration stewards. The heightened ability to adapt on the fly ensures agencies respond quickly to new information, maximize the effectiveness of their budgets, and ensure resources are always aligned with the agency's strategic goals and the President’s Management Agenda (PMA).

AI as a Strategic Ally

Generative AI is poised to serve as a strategic ally for federal budgeteers. By automating routine tasks, enhancing document and template management, and providing deep insights through scenario planning, AI frees up time and resources, allowing agency personnel to focus on making informed, strategic decisions that drive programmatic success and solve society’s challenges.

As AI evolves and integrates more deeply into federal budgeting software, this technology will fundamentally alter how federal agencies operate and transform the art of the imaginable into the practical.

The future of federal budgeting is here, and it’s smarter, faster, and more insightful than ever before. Agencies embracing new federal budgeting software, like Unison PBF, will lead those that follow.

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