How State and Local Governments Can Improve Taxpayer Trust with Automated Compliance and Risk Management

State and local governments – and the funding they receive – rely on the trust of taxpayers. Without this trust, these institutions can find themselves in a negative feedback loop, with degraded services continuing to impact taxpayer support and confidence. Gaining trust requires transparency and security, two things that are difficult to achieve with outdated systems.

Why State and Local Governments Struggle with Manual Spend Processes and Inefficiencies

Whether it’s due to budget constraints, procurement challenges, or an old-fashioned resistance to change, state and local governments rely on insufficient processes. In a recent report, 29% of industry leaders told Wakefield Research they use an outdated T&E solution, and even more said the same for their accounts payable solution (30%). This outdated technology can impact more than just institutional efficiency. These organizations may be at risk for fraud or cyber attack and subject to severe penalties, such as a loss of state or federal funding, civil lawsuits, or reputational damage.

How Automation Improves Compliance and Efficiency in Government

Despite relying on outdated, noncompliant systems, 33% of state and local government leaders say their employees are hesitant to move away from paper systems. This hesitancy is driven by a fear of job loss as technology advances and poses a number of issues. For one, paper systems are slow, causing employees to spend more time on tedious tasks. In fact, nearly half of state and local government leaders are burdened with manual data entry with their current travel and expense solution. These manual systems also lack a holistic view of spending activity, preventing accurate reporting and informed decision making. Most importantly, information is more likely to fall through the cracks. Without any form of security to keep it safe, the whole organization is at risk.

The Benefits of Automated Travel and Expense, AP, and Spend Management Systems

The question employees should be asking is not how technology can replace them, but how it can help them. An automated system can simplify paper audit processes by maintaining detailed, accessible records. It can also provide complete visibility into spending. For instance, you can more easily track grant funds to ensure they're used appropriately and reported accurately. Automation also allows for added security and compliance. Automatic audits and compliance checks enforce procurement and travel policies so you don’t have to. While built-in safeguards like advanced encryption and access controls maintain privacy.

When you use an automated system that applies advanced technology like AI and machine learning, you can reduce errors and increase efficiency. In fact, SAP Concur data shows that accounts payable automation can save 12 hours a week per finance or accounting employee, as opposed to 13 hours spent processing vendor invoices each week. Plus, the right solution can integrate with existing systems to create a single, centralized view of information to prevent budgetary overruns and fraud, something nearly a quarter (24%) of state and local government leaders lack, according to Wakefield Research.

How to Enhance Security and Prevent Fraud with Automated Compliance Tools

Given their level of data sensitivity, security and compliance are especially important for state and local governments. Cybersecurity threats continue to grow more sophisticated and can easily outpace legacy technologies, while internal fraud poses ongoing risks if left unchecked. According to the Association of Certified Fraud Examiners, a typical fraud case lasts a full year before it’s detected and results in an average loss of $120,000 for state and local governments. What’s worse, over half (56%) of occupational fraud schemes in government organizations come from corruption, while 26% come from billing and 16% from expense reimbursements.

An automated spend management system like SAP Concur can reduce the risk of fraud by leveraging AI and machine learning to closely track errors and distinguish between intentional misuse and accidents. It can also enforce travel and expense compliance in real time using built-in policy checks and keep sensitive information safe with embedded data masking and encryption. Plus, a single-sign on (SSO) or a username and password with two-factor authentication can limit access to authorized users and enforce security whether they’re in the office or on the road.

Safe and Secure Financial Systems for State and Local Governments

The more secure your financial management system, the safer you will keep the information of your citizens and the more trust you will earn. Not to mention, the more automated the system, the more time you’ll have to make your state, city, or town a better and safer place for all.

Streamlining processes and improving compliance today makes for a more successful tomorrow. See how SAP Concur solutions help state and local governments make the most of their budgets and a lasting impact on their communities.