There’s long been a determined effort on the part of states and local governments to detect fraud, waste, abuse, mistakes, and control failures in local government vendor payments. This topic has only gotten more attention in recent months as a number of states are following the somewhat controversial efforts in the federal government to target the same issues. 

Enter Artificial Intelligence via a new initiative that uses analytics and machine learning to “uncover anomalies and patterns indicate of fraud and error in vendor payments,” according to a recent a blog post from ThirdLine, Inc., which provides data-driven reporting and analytics for local governments in the United States.  Other partners in this effort are UHY Advisors, which provides audit, tax, consulting and advisory services, and Rutgers University.

Pilot programs are already in place in several local governments to refine statistical models and make certain they’re effective. If proven successful, these pilots will lead to a nationwide rollout of these tools.

“"Governments today face heightened scrutiny over their management of public funds," David Osborn, CEO and Co-Founder of ThirdLine told us. "By partnering with Rutgers, we are delivering innovative solutions that both identify and mitigate fraud and waste and enable governments to demonstrate their dedication to fiscal prudence."

This partnership is a natural next step following a collaboration between Rutgers and the Government Finance Officers Association. In that work, the two used AI to help automate financial data extraction from local government reports, with the goal of reducing manual efforts and enhancing data accuracy.

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