AI in Grant Management: Use Cases for Public Sector

AI has the potential to significantly transform the public sector, but adoption remains uneven. Many state and local government agencies are still in the early stages, where AI use is limited, ad hoc, and often exploratory. This cautious approach has left many public sector organizations trailing behind their private sector counterparts in realizing the full value of AI.

However, a slow start also presents a unique opportunity. State and local governments, often operating under significant budget and staffing constraints, are ideally positioned to benefit from a more strategic, systematic approach to AI. By targeting high-volume, labor-intensive workflows, these agencies can unlock meaningful efficiencies and cost savings.

One of the most promising areas for immediate impact is grants management. Characterized by repeatable, structured processes and substantial documentation requirements, grant management is well-suited for generative AI applications. Following are practical use cases where AI can deliver tangible improvements in speed, accuracy, and overall effectiveness.

Claims for reimbursement

Public sector grant managers can face dozens of reimbursement claims every week, and each claim comes with its own stack of invoices and line items. AI can perform the first pass, slashing the review time of the human-in-the-loop role.

An AI agent built with OpenAI custom GPTs or Microsoft™ Copilot chatbots and integrated directly with core systems like enterprise resource planning (ERP) solutions where available can be trained using examples of compliant and noncompliant submissions. When a claim arrives, the agent can check the standard form for missing fields, vague descriptions, or costs that fall outside the grant’s allowable uses. It then can crossmatch invoice data against the figures on the form, flag discrepancies, and deliver a concise synopsis of its findings.

Consequently, reviewers might spend 10 minutes instead of half an hour on average per claim, and they can focus on true exceptions rather than validating every detail. State and local government agencies can start small, such as with a prototype custom GPT running in a secure environment and then look to a more integrated and higher value-adding solution integrating directly with an ERP like Microsoft Dynamics 365™ software.

As confidence in the technology grows, organizations can incorporate the AI agent into existing workflows and automatically email reviewers a status report with a direct link to the claim in the ERP. Whether organizations build in-house or engage a third party, AI-enabled pre-scrutiny provides a practical path to stronger compliance, faster payments, and more capacity for strategic program oversight – without compromising accountability.

Generating new grant agreements

When following the traditional copy-paste-edit routine, drafting grant agreements can eat up hours, even though each contract shares familiar clauses and boilerplate structure. A specialized AI assistant can shrink that task down to minutes.

Using a custom GPT, a grants office can load its 10-20 best recent agreements that cover varied programs, risk profiles, and compliance thresholds into the model’s private knowledge base. Paired with clear drafting instructions – for example, “always include six core sections” or “apply these 20 standard conditions verbatim” – the agent can apply the organization’s preferred language and risk posture.

When a new grant agreement gets underway, staff can launch the GPT, answer a short set of prompts, such as recipient name, award amount, performance period, special conditions, and monitoring frequency. The GPT can then produce a draft that can be, in many cases, more than 90% complete. Clauses then cascade in the prescribed order, placeholders can flag data still required, and any bespoke language will stand out for review.

Because the model never leaves the organization’s secure environment, sensitive terms stay protected. As teams feed each finalized agreement back into the knowledge base, the assistant continually refines its style and coverage. The result is faster turnaround, stronger compliance, and more time for staff to advise program managers rather than wrestle with formatting.

Searching grants agreements for requirements

Reviewing executed grant agreements, which can sometimes extend into hundreds of pages, can be a time-intensive task, especially when compliance or oversight requires extracting consistent information.

Combing through lengthy contracts to find key data points, such as the recipient, award amount, and expiration date, or broader elements like the purpose of the grant or presence of subcontractors can quickly drain time and resources.

Crowe Capture, a Microsoft Power Apps™ solution powered by AI, can streamline this tedious process. This tool allows users to upload a grant agreement, pair it with a preset list of prompts based on requirements, and, in minutes, generate answers aligned to each prompt. Crucially, it also provides citation references, pinpointing the exact section or paragraph within the agreement where each answer is located. Such sourcing preserves trust and enables quick validation by the human reviewer.

Instead of manually completing a blank form, reviewers receive a structured output tied to the agreement’s source text. Whether it’s a dozen requirements or 100, Crowe Capture can standardize the process, accelerate document review, and free up staff to focus on interpreting results instead of just searching for them. The best part? The more volume involved, the greater the benefit for the organization.

Get an assist on AI applications

State and local government agencies might be reluctant to move quickly into AI adoption for understandable reasons. For instance, they might have to comply with regulatory requirements that prevent them from using any AI platforms that don’t meet a certain security standard or that host data on overseas servers. Perhaps they haven’t seen any truly valuable results so far and aren’t sure if it’s for them.

However, working with a team that understands your unique needs and how AI can be customized for public sector organizations can quickly demonstrate that this powerful technology isn’t just for corporate giants and cutting-edge tech companies. It could help your organization achieve real, immediate results, too.

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