State agencies are increasingly using AI to enhance operational efficiency, particularly in managing large-scale grants, while contending with challenges in cybersecurity, data privacy, and establishing regulatory frameworks for its safe and effective use.

In Florida, state agencies are embracing artificial intelligence (AI) to streamline their operations, particularly in grant management.

A proliferating development in this area is the adoption of AI-driven systems that enhance the efficiency of handling large-scale grants. KPMG Government Partner Anthony Monaco spoke with The Capitolist on Thursday to provide insight into AI’s function within agency work.

KPMG’s AI model makes the management of grants more efficient, according to Monaco, aiding in tasks such as timesheet processing and fraud detection, which could lead to time and cost savings for the government.

Moreover, the platform manages high-volume grant activities by transforming unstructured data into a structured format and applying intelligent automation for accurate information processing and fraud detection.

“We’re doing simple routines, and it doesn’t need to be very complex,” said Monaco. “An example that we use is that we found professionals charging for 25 hours in a day or more, to seek reimbursement. So as simple as that is, we’ve identified fraud in those situations.”

However, the incorporation of AI into governmental functions is not without its challenges. Concerns regarding cybersecurity, data privacy, and the establishment of effective regulatory frameworks are paramount to its implementation. The pace at which technology evolves often surpasses the development of corresponding rules and guidelines, as reflected in regulating legislation filed during the ongoing Legislative Session.

Monaco pointed to the importance of not just focusing on the AI technology itself, but also on the surrounding processes and regulations. Effective governance, clear policy-making, and robust cybersecurity measures are essential for the safe and effective use of AI in government operations, he contended.

“This whole AI is moving very fast,” Monaco commented. “Governments are starting to pay close attention to it because they see the key benefits that will come out of it. However, there’s an increased level of risk because you’re looking at AI and how you implement it. The technology itself, I would say is fairly straightforward, but it’s all the other activities around it.”

Lawmakers are palpably trepidatious towards new technologies like AI, as noted by former Senator Jeff Brandes during an interview with The Capitolist last month, a claim that Monaco corroborated. As such, Monaco stated that he anticipates a flurry of regulatory activity to be drafted in the coming months.

“As our clients start to move forward, those policies will be implemented, put in place approved, and deployed within the next year,” he said. “It’s what I would refer to as uncharted territory, and it’s new and evolving. It will be absolutely important that [lawmakers] feel comfortable with policy and governance.”

At the Florida Chamber of Commerce’s annual event last October, business and technology leaders underscored the urgency for the state to invest more in AI to ensure continued economic growth.

Saif Ishoof, founder of Lab22c, focused largely on the centrality of AI and similar emerging technologies in current business trends. Speaking to leaders across the state, he assessed Florida’s Research and Development (R&D) expenditures on AI, warning of the economic repercussions the state could face should underinvestment persist.

“You have to be thinking right now, today, [and] yesterday about how you’re incorporating these technologies into your businesses across every single functional role you have in your company,” he said. “Marketing, sales, HR, operations, finance, back office.” 

Ishoof further spoke of Florida transforming into a central hub for tech talent with proper emphasis and investment strategy. For corporate entities, he championed the incorporation of AI across sectors, promoting AI’s potential to overhaul conventional operational methods, and insisted that leaders transition from viewing AI as an impending threat to recognizing it as a lucrative opportunity.

“It’s incumbent upon each and every one of us to become fluent with these next frontier technologies,” said Ishoof.

He also highlighted the lack of Florida cities on the list of top AI hotspots nationwide, leading to worries about Florida becoming a tech talent exporter.

On the legislative side, Sen. Joe Gruters introduced legislation in December that seeks to regulate and standardize the use of artificial AI across state agencies.  The bill, if adopted, would lay the groundwork for a uniform approach to AI deployment and governance within the state. A primary provision involves the formation of an Artificial Intelligence Advisory Council, to be housed within the Department of Management Services.

The council would be tasked with several key functions: evaluate the need for legal reforms and establish an ethics code for AI use in state government; study the impact of AI on the rights of Florida residents; assess potential benefits and risks of AI for the state, its people, and businesses; and recommend policies to promote AI development in Florida.