In an operating environment focused on reducing financial waste and creating transparency in operations, government leaders are scoping out where and how technological tools can help. Fortunately, agencies across government are already exploring opportunities to apply artificial intelligence to their operations in ways that increase efficiency and save money.
One way to do that is to use financially-savvy AI in the budget forecasting process to seek out unused dollars to create cost savings and smart fiscal management. AI has already been used by commercial banks as a consumer tool to aid in financial management by tracking spending categories and trends. At this moment, when federal efficiency and cost savings are paramount, U.S. government agencies can also deploy AI as a financial management aid and apply it across vast amounts of data and even across lines of business.
The Financial Management Data System (FMDS) used by the National Oceanic and Atmospheric Administration illustrates a standout example of where AI and data analytics are helping an agency achieve its goals with smarter financial management methods.
The system leverages a commercially-developed custom AI module that can make sense of an agency’s extremely complicated financial data patterns and pre-process it in ways that help personnel identify spending behaviors for individual contracts to predict how much of their budget could potentially be left unused on each contract. In the first couple of years of deployment, the system has identified tens of millions of dollars that had not yet been allocated due to complex planning practices.
FMDS gives financial leaders greater visibility into the agency’s finances by breaking down silos to bring data from disparate systems into a “single pane of glass” to give them the data they need at their fingertips to make smart business decisions. Previously, financial managers had to manually pull data from separate systems for financial records, workforce management, contracts and procurement. The system’s analytics provide an integrated view of timely data that enables better decision-making through improved visibility into past financial performance against plan as well as AI-enabled forecasts into future spending behavior.
At a time when “efficiency” has become one of the most prevalent buzzwords in government, FMDS is a proven example of an agency using technology to ensure funding is used as effectively as possible. First created and deployed in 2018, it saves time that was previously dedicated to manual processes while eliminating the potential for errors and miscommunication.
The effect can be compared to consumer applications that give customers a view across all their bank accounts, credit cards and electronic payment accounts in aggregate. In this case, the AI system facilitates prudent expenditure of taxpayer dollars and cuts down on waste by identifying unused funds that might otherwise have been missed. This approach can help government decision makers connect strategic and mission-critical efforts with appropriate funding.
In addition, the system is based on commercial software that can be tailored to the unique needs of different agencies. This aspect of the system has become even more critical since the president’s executive order (EO) from April 2025 requiring that “agencies shall procure commercially available products and services, including those that can be modified to fill agencies’ needs, to the maximum extent practicable.” Going forward, agencies adopting new financial management systems will have to prove their systems represent the most cost-effective option. By embracing commercially available solutions, they will be able to more easily comply with the EO.
Further, FMDS’ AI resides in the cloud, so it has been scalable from Day One. The system was built as a microservice architecture, which may be thought of as individual Lego blocks, each one scalable in terms of data volume, performance and other factors — allowing an agency to add new “blocks” as requirements and demand increase. Rather than a one-size-fits-all monolith, the tool is scalable and repeatable if developed with an intimate understanding of the agency’s priorities, structure and funding streams.
FMDS presents an example of how an agency can evolve from an operating model focused on manually pulling data from various sources to one that gives leadership real-time visibility and vision into that data, and by extension, into the agency’s contracts and acquisitions. And with the additional ability to do financial planning, the system can expand to assist with issues like workforce management.
With these advantages, the FMDS model provides a validated blueprint for other agencies that want to increase efficiency through AI while complying with the administration’s orders to leverage commercial solutions.
Theresa Cauble is a senior director solutions architect at ASRC Federal.
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