Technology and the Audit
The World is Changing and So Should Municipalities
Modernizing Municipalities Through Technology and Audits
Municipalities have traditionally been viewed as entities that do not, can not, and will not modernize. They typically reside in courthouses that were built centuries before, require a lot of manual paperwork, and can be said to be “out of touch” with the technology side of the world.
But do not fret! By embracing current technology trends and, believe it or not, receiving valuable audit services, municipalities can move to the forefront of disruption. Read on for ideas on how to further incorporate six technologies into your municipality!
Municipalities Have Technology Options?
Data analytics is an area that can be extremely beneficial to municipalities. By implementing data analytics procedures in both internal and external audit functions, the results gathered allow for a more focused approach to areas of relevance surrounding the municipality. Deeper insights into risks and controls at the municipality are obtained, allowing for more meaningful recommendations and implementation of processes and procedures for the municipality that are targeted and focused on relevant areas. Data analytics help reign in the “big data” available on municipalities…data ranging from financial information to taxpayer bases to social media presence. By analyzing meaningful data sets, trends are determined for the municipality, which can help facilitate a better budgeting/forecasting process.
Also contributing to the reigning in of Big Data is artificial intelligence (AI). AI assists with automating more of a municipalities’ operations, which helps facilitate a more meaningful audit. New hire forms for the Human Resources Department, for example, can be automated and filled out electronically by new employees. Not only does this save the HR Department time from manual tasks, allowing them to focus on higher level HR work, it also reduces the amount of paper and storage needed for these forms. AI can also assist in the municipal court by allowing for automated notifications of court appearances in an effort to reduce no-show rates and increase collections as more scheduled appearances are attended. The automation of these types of services allows auditors easier access to the information, with accurate documents being obtained at the start of the audit process.
While AI serves as the science behind automation, bots assist with the implementation of said automation. For municipalities and their audits, bots allow for monitoring to occur on a more real-time basis. Anomalies and trends can be addressed in a more timely fashion. By identifying such items early on during a municipality’s operating cycle, errors are corrected and trends reviewed to help capitalize on positive ones or dig into the cause of negative trends before too much time has passed. Bots can also be utilized internally within municipalities in the form of chatbots. Chatbots are utilized on municipality websites to help obtain answers to generic citizen questions, for example, those surrounding property tax due dates, or with obtaining information when a citizen actually calls into the municipality before the citizen is connected to an employee. This increases the efficiency of municipality personnel by reducing the number of phone calls taken within each department as well as making sure the call is directed to the correct department based off of information provided by the caller.
Blockchain is a word that is being discussed more and more in the marketplace. It is a shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network. As with bots, Blockchain has the potential to greatly assist with internal processes and transitions. The automation of such items, paired with the virtually immutable functionality of a Blockchain, leads to a more effective audit as any adjustments or modifications to the Blockchain and the information it contains is immediately apparent. Blockchain greatly improves many processes, from tagging vehicles to tracking of municipality assets.
Implementation of the technology discussed above lends itself to a more continuous audit environment. Instead of auditing at the end of the year, sometimes months after year-end, certain aspects surrounding the municipality can be audited on a more frequent basis…say quarterly or monthly depending on the circumstances. Again, this continuous audit approach lends itself to identification of errors, anomalies, and trends much earlier in the operating cycle of a municipality than a traditional annual audit completed only after the year has ended.
Don’t Forget About Security!
The aforementioned products and services are exciting and integral to the future success of municipalities. But one cannot overlook the importance of cybersecurity, the sixth technology applicable to your municipality and audit. Data breaches continue to rise. Municipalities have a vast amount of sensitive personal information on its citizens available within its databases. A breach not only puts this information into the hands of the “bad guys” but some municipalities will never fully recover from such a breach as they are very costly. Cybersecurity assessments and discussions with qualified IT professionals are a must as more and more processes become digital.
It’s a Joint Effort
By implementing the technological changes that are coming at a much quicker rate than in the past, auditors and municipalities can ensure a higher quality audit process occurs. Know the environment. Stay informed of technology trends. Visit with peer groups. But continue to work together, as it will take both parties to ensure the desired success is achieved.