Artificial intelligence (AI) is quickly becoming a transformative force in the public sector, enabling governments, school districts and utilities to improve efficiency, enhance service delivery and make more informed decisions. But AI is not a futuristic, one-size-fits-all solution—it is a tool that, when applied thoughtfully and strategically, can support public sector missions while ensuring accountability, transparency and human oversight remain central.
AI in the public sector is already delivering real value, from accelerating budgeting processes to strengthening cybersecurity defenses. When implemented with the right governance and planning, AI can help public organizations better allocate resources, respond to community needs and streamline complex operations.
Practical AI applications for state and local governments
Across the country, governmental entities are already putting AI to work to solve real-world challenges. Common use cases include:
- Demand forecasting and resource allocation: AI can help forecast needs for services, such as police coverage or public works, and align staffing or funding based on data-driven insights.
- Dynamic budgeting and financial planning: Priority-based budgeting models can be enhanced with AI tools that connect community needs to financial decisions, allowing organizations to better justify spending and align resources with goals.
- Cybersecurity and IT optimization: AI can be used for IT resource and cloud spend optimization, automated cyberattack detection and mitigation and ongoing monitoring of AI model behavior, enhancing capabilities and reducing risk.
- Operational automation: From streamlining invoice processing to speeding up procurement training, AI tools can dramatically reduce manual workloads, freeing staff to focus on higher-value tasks.
These applications demonstrate how AI can be leveraged not to replace public employees, but to augment their capabilities and improve operational efficiency.
Responsible implementation and AI governance
As public sector organizations move toward implementation, the importance of governance and policy frameworks cannot be overstated. Responsible AI use starts with clear guardrails—defining how, when and why AI is used, and ensuring it aligns with ethical and regulatory standards. Municipalities like New York City1 have taken the lead in developing a public AI framework that balances innovation with oversight, offering a model for others to follow.
Important policy considerations include:
- Establishing human-in-the-loop (HITL) protocols for decision support
- Evaluating and mitigating algorithmic bias
- Securing data privacy and cybersecurity
- Maintaining transparency with constituents about AI use
Organizations should also consider how existing systems, such as enterprise resource planning (ERP) tools, will interact with AI platforms to avoid redundancy and inefficiencies.
Assessing organizational readiness
Successfully leveraging AI begins with understanding where an organization stands today. A comprehensive readiness assessment helps identify strengths and gaps across five key dimensions:
- Strategic alignment: Is there a clear mission or problem AI is intended to address?
- Leadership support: Do leaders understand and champion AI initiatives?
- Technology infrastructure: Are current systems equipped to support AI tools and data integration?
- Workforce capacity: Are staff members trained and willing to work with AI-driven systems?
- Governance and compliance: Are there policies in place to guide ethical and secure AI use?
Common barriers such as lack of knowledge, budget constraints or uncertainty about return on investment can be addressed through phased pilot programs, stakeholder education and collaboration across departments.
Moving from strategy to execution
For organizations looking to begin or expand AI efforts, a stepwise approach can set the stage for long-term success:
- Define specific objectives that AI can help solve
- Evaluate readiness and identify capability gaps
- Select appropriate tools or platforms that integrate with current systems
- Start small with pilot projects tied to measurable outcomes
- Build internal capacity through training and process change
- Develop governance frameworks and legal oversight to manage risk and ensure accountability
Successful AI implementation is not about adopting technology for technology’s sake; it’s about aligning new capabilities with mission-driven outcomes that serve communities better.
How we can help
At Baker Tilly, we help public sector organizations assess, plan and implement AI initiatives that are aligned with their goals and grounded in practical execution. From readiness assessments and pilot design to governance development and training, our professionals bring cross-disciplinary expertise to help you responsibly unlock the power of AI.
