Ask someone working in government finance what takes up the most time in their day, and the answer might have surprisingly little to do with actual financial planning.
There’s the budget report that needs another round of updates, the grant documentation waiting on information from another department, or the procurement approval that’s been sitting in someone’s inbox for a week. None of these tasks are particularly unusual. In fact, they’re so routine that the amount of time spent managing them can be easy to overlook.
But when a finance department consists of three people, as many do, even a few hours of unnecessary administrative work can make a difference.
Euna Solutions’ 2026 State of Public Sector Finance research brings some perspective to the issue. Based on responses from 197 public sector professionals working in budgeting, grants management, and procurement, the research examines the challenges these departments are facing and how well their current processes are holding up.
There are differences between the three functions, of course. Budget directors are concerned with funding projections and financial planning, grants managers are navigating compliance requirements, and procurement professionals are responsible for keeping purchasing activity moving while following established procedures.
What stands out in the research, though, is how often their frustrations overlap. Limited staffing, disconnected information, and time-consuming administrative processes appear throughout the findings. And as government organizations consider new technology, particularly artificial intelligence, those existing challenges have a lot to do with what they’re realistically prepared to adopt.
Key Takeaways
- Public sector finance management requires strategic oversight of budgeting, grants administration, and complex procurement workflows.
- Staffing shortages and increasing compliance requirements create significant operational strain for local government finance departments.
- Manual processes like spreadsheets and email chains hinder data sharing and increase administrative workload significantly.
- Purpose-built financial software reduces manual dependency by centralizing data for budgeting, grants, and procurement teams.
- Modernizing financial operations through automation and integrated technology solutions improves overall government efficiency and audit readiness.
How Staffing Shortages and Compliance Requirements Create Financial Strain in Local Government
Public sector finance has always involved a certain amount of uncertainty. Revenue projections change, funding priorities shift, and unexpected expenses have to be accounted for. Finance professionals know how to navigate those situations.
What’s becoming harder to manage is the volume of work surrounding those decisions.
Among grants professionals surveyed, 80% expressed concern about long-term funding stability, while 77% reported an increase in compliance oversight. More than half, 54%, identified limited staff capacity as a major challenge.
Those concerns become more significant when you consider the size of the teams doing the work. More than half of the budget departments represented in the research have three or fewer employees, and 58% of procurement teams have no more than five.
A small department can be highly effective, but there’s only so much time available in a workweek. When employees are responsible for routine processing, financial analysis, reporting, compliance documentation, and answering requests from leadership, something inevitably takes longer than anyone would prefer.
Cloud-based financial technology is designed to mitigate administrative workloads by automating routine tasks. In many cases, however, government employees are still working with systems that require considerable manual effort.
More than 44% of surveyed grants and procurement teams rely on spreadsheets and other manual tools. In budgeting, 39% of organizations take three months or longer to develop their budgets.
It’s worth distinguishing between the time required to make sound financial decisions and the time spent preparing information so those decisions can be made. Reviewing departmental requests, considering community priorities, and evaluating funding options all deserve attention. Reentering figures into multiple spreadsheets or searching through emails for the latest version of a document is another matter.
The problem also extends beyond individual departments, affecting cross-functional data sharing. Consider what happens when a municipality receives a grant for a new infrastructure project. Grants staff need to track the award and its conditions, the finance department needs to incorporate the funding into its budget, and procurement may need to begin sourcing goods or services. Each group has its own responsibilities, but all three are working with information related to the same project.
When that information lives in separate systems, even a routine update can require several emails, multiple spreadsheets, and a fair amount of checking to make sure everyone is working from the same numbers.
For government leaders, this is an important part of the capacity conversation. Staffing shortages are difficult to address, particularly when budgets are tight. Improving the way existing employees access information and complete their work may be a more immediate opportunity.
Key Capabilities of Modern Government Financial Management Systems
The software needs of a grants office are different from those of a procurement department, and neither functions quite like a budget office. A single set of features isn’t going to meet every requirement.
There are, however, some recurring problems that technology should be able to address. The 2026 research provides a useful starting point for determining which capabilities deserve attention. Knowing how to modernize public sector financial operations requires identifying these specific technological gaps.
Making Budget Planning Less Dependent on Spreadsheets
Budget development requires a tremendous amount of coordination, particularly for organizations collecting requests from multiple departments and evaluating changes in revenue, staffing, and capital needs.
While manual spreadsheets can manage basic calculations, they lack the scalability required for complex government budget coordination. The difficulties usually appear when assumptions change.
A revised revenue estimate may affect several departments. A proposed staffing adjustment can change personnel expenses for multiple years. If finance employees have to manually update several files and verify that the calculations still agree, producing an accurate picture of the budget becomes unnecessarily labor-intensive.
Scenario planning can help organizations evaluate these decisions before they’re made, yet 30% of surveyed budget teams reported doing no formal scenario planning at all. Budgeting software should make it easier to compare assumptions, adjust forecasts, and see how potential changes affect the broader financial plan. Having that information in one place can be particularly useful during budget discussions, when elected officials or department leaders need to understand the implications of different options.
According to the research, 74% of organizations still publish their budget books as static PDFs or printed documents. Those formats serve a purpose, but they can be cumbersome for residents trying to find information about a particular program or understand how spending has changed over time.
Digital budget book creation and financial publishing tools give governments another way to present that information, while also reducing some of the manual formatting and document preparation that falls to finance staff each year.
Why Centralized Grants Management Improves Compliance and Reporting Efficiency
Grants management presents a different set of administrative challenges, many of which become more demanding after funding is awarded.
Grants management involves tracking unique conditions, deadlines, and reporting obligations for every award received by a municipality. Managing a handful of awards might be relatively straightforward. Managing dozens, each with different requirements and timelines, is another story.
For some teams, the administrative workload leaves little room for anything else. The 2026 research found that 39% of grants professionals spend as much as half their workweek on manual data entry and related tasks. Another 38% cited a lack of centralized tracking as a significant challenge.
When information is scattered across spreadsheets, emails, and shared folders, staff may have difficulty locating the documents needed for a report or confirming whether a requirement has been completed. The work becomes even more complicated when someone leaves the organization, and another employee has to take over their responsibilities.
Full lifecycle grants management software can help teams organize applications, awards, reporting deadlines, expenditures, and compliance records in one system. Automated notifications and reporting capabilities are particularly useful for departments managing several funding sources simultaneously.
For organizations already concerned about increasing oversight, being able to access complete, consistent records without assembling them from multiple locations is a game changer.
How eProcurement Solutions Streamline Public Purchasing Workflows
Public procurement professionals have been remarkably consistent about what they want from technology. For three consecutive years, from 2024 through 2026, respondents identified streamlining and automating processes as their top priority.
It’s understandable. Procurement teams regularly coordinate work involving department representatives, evaluators, approvers, legal staff, and suppliers. Each participant may need different information, and the process has to be documented in a way that supports fair and compliant purchasing.
Nearly half of the teams surveyed still rely on spreadsheets, email, or paper to manage that activity. A cloud-based eProcurement solution can reduce the amount of manual coordination required by bringing solicitation development, electronic submissions, evaluations, contract management, and supplier information into a common environment.
That doesn’t eliminate the review and decision-making involved in public purchasing. Procurement staff still need to evaluate proposals, exercise professional judgment, and ensure policies are followed. What changes is the amount of administrative work required to support those responsibilities.
When evaluating technology, governments should also consider how procurement information will connect with budgeting and other financial systems. A purchasing decision ultimately affects an organization’s finances, and employees shouldn’t have to recreate the same information across multiple applications to account for it.
How Are Governments Using Integrated Financial Management Software?
There’s no shortage of technology designed to help organizations manage financial processes. For government buyers, the more difficult question is often whether a particular solution will work within their existing operations and address the problems employees encounter every day.
Euna Solutions provides purpose-built software for public sector budgeting, grants management, and procurement, that help organizations connect financial processes and reduce their dependence on manual tools.
The impact of those changes can look quite different depending on the organization.
In Lakeway, Texas, the finance department had been using spreadsheets to handle budgeting, including personnel expenses that required accounting for salary adjustments, step increases, and staffing changes during the year.
After implementing Euna Budget, the city was able to manage its budget information in a more centralized system and give department leaders greater access to financial records. A mid-year budget update that previously took approximately one week was completed in about an hour. For a finance team, that kind of improvement means a substantial amount of time can be redirected toward other responsibilities during an already demanding budget cycle.
The City of Detroit, Michigan, faced challenges involving grant oversight and the documentation needed to support compliance across departments.
With Euna Grants, Detroit improved how grant information was organized and managed. Following implementation and broader financial management improvements, the city reported an 88% reduction in audit findings and more than $202 million in grants and donations awarded.
Bingham Healthcare in Idaho offers another perspective on grants management. The organization needed to handle a growing portfolio without allowing administrative work to overwhelm its team. By replacing manual tracking with Euna Grants, Bingham Healthcare grew to manage three times as many active grant applications annually while maintaining compliance.
In procurement, Indian River County, Florida, moved away from paper evaluations and spreadsheet scoring by implementing digital workflows through Euna Procurement. The county centralized solicitation activities and improved how evaluators accessed and reviewed information, contributing to its broader procurement improvement efforts. In 2026, Indian River County earned the Achievement of Excellence in Procurement Award.
These organizations weren’t all trying to accomplish the same thing. Lakeway wanted to make budgeting more manageable, while Detroit and Bingham Healthcare needed better ways to oversee grants. Indian River County focused on improving procurement processes.
Their experiences are useful because they show what technology improvements can mean in practical terms. A budget update takes an hour instead of a week. A growing grants portfolio becomes easier to oversee. Procurement evaluations no longer require stacks of paper and separate scoring files.
For government leaders weighing a software investment, those operational improvements are worth examining alongside features and technical specifications.
The Role of Artificial Intelligence in Government Financial Management
With so much attention being given to artificial intelligence, it’s reasonable to wonder how quickly government finance departments are incorporating it into their work. Survey data indicates that public sector professionals are interested in AI but remain cautious regarding responsible adoption.
Half of budget teams surveyed reported no AI use at all. In procurement, 39% expressed interest in using AI, but only 17% felt their organizations were prepared to adopt it responsibly. Grants management showed somewhat greater activity, with 29% of respondents already using automation or AI.
Those numbers suggest that many public sector professionals are interested in what the technology could accomplish but have questions about how to introduce it appropriately.
Some of those concerns are specific to government. Financial information may be sensitive, procurement decisions require careful documentation, and agencies have an obligation to understand how technology influences their work. An incorrect or poorly supported AI-generated recommendation could create problems, particularly if staff don’t have a reliable way to verify it.
There are also more basic operational questions. What information would an AI tool have access to? Is that information accurate? Would employees be able to see how a result was produced?
For organizations still struggling with disconnected records, those questions deserve attention before an AI application becomes part of an essential financial process.
Current AI Applications in Public Sector Budgeting, Grants, and Procurement
Although broad AI adoption remains limited, certain uses are beginning to make sense for public sector finance teams. Budget analysts, for example, spend considerable time responding to questions about expenditures, revenue, and departmental spending patterns. AI capabilities built into budgeting software can help employees explore financial information using natural language, produce supporting analysis, and examine different budget assumptions.
Euna Budget includes AI capabilities designed to assist with those activities, helping users work with financial information without having to manually prepare every query or report.
Grants teams have their own opportunities to reduce research and administrative work. Searching for funding can involve reviewing lengthy notices, comparing eligibility requirements, and determining whether an opportunity aligns with the organization’s programs. AI-assisted opportunity matching can help staff identify potentially relevant funding sources and spend more of their time evaluating which applications are worth pursuing.
Procurement teams may find similar value in tools that assist with solicitation preparation. Euna Procurement’s AI capabilities, for instance, reviews draft solicitations and identifies language that may be unclear or inconsistent. Addressing those issues before publication can help reduce avoidable questions and revisions later in the purchasing process.
None of these applications requires AI to make the final decision. Finance professionals still determine how to interpret financial information, grants managers decide which opportunities to pursue, and procurement teams remain responsible for evaluating proposals and following purchasing requirements.
That’s an important consideration for governments evaluating AI. The most useful application may be one that handles a relatively narrow task employees already understand well enough to review.
Future Trends in Government Data Management and Financial Automation
It’s difficult to predict exactly how government organizations will use AI several years from now. The technology is developing quickly, and the policies governing its use will continue to evolve. What seems less uncertain is the importance of having reliable financial information available in the first place.
Consider a government organization whose budget department, grants office, and procurement team each maintain different records related to the same project. If those records aren’t consistent, employees already have to spend time reconciling them. Introducing AI doesn’t resolve those discrepancies automatically.
In some cases, it could make them more difficult to catch if staff rely on an answer without understanding which information was used to produce it. This makes data management an important part of any conversation about future technology investments. Governments considering AI should understand how financial information is maintained, whether records can be accessed across departments when appropriate, and who is responsible for keeping that information accurate. They also need policies for data security, human review, and acceptable uses of AI-generated content.
For organizations that aren’t prepared to implement AI yet, improving those processes is still productive work. Better recordkeeping and fewer manual handoffs have immediate value for employees who need accurate information to do their jobs.
The same applies to automation more broadly.
A procurement department that no longer has to chase down approvals through email is better positioned to manage its workload. A grants office with centralized reporting records can spend less time preparing for audits. A finance team that can revise budget assumptions without rebuilding multiple spreadsheets has more flexibility when circumstances change.
These improvements may be less attention-grabbing than the latest AI application, but they’re relevant to the challenges government departments are dealing with right now.
Strategies for Modernizing Public Sector Financial Operations
Departments are managing demanding workloads with small teams, and many continue to depend on manual processes for activities that require coordination, accuracy, and careful oversight. At the same time, interest in new technology is growing, even as organizations work through questions about readiness and responsible adoption. For leaders considering where to invest, the research makes a case for looking closely at the everyday work of finance employees. Learning how to modernize public sector financial operations involves assessing these manual workflows.
Which activities require information to be entered more than once? How often do employees have to contact another department to locate a document or verify a figure? How much time goes into preparing reports that could be generated from information already maintained in a financial system? Those questions can help organizations identify improvements that will make a difference now, whether or not AI is part of the immediate plan.
Euna Solutions works with public sector organizations to improve budgeting, grants management, and procurement through purpose-built, cloud-based software. Its solutions help departments manage financial information, reduce repetitive administrative work, and maintain the records needed for oversight and reporting.
For governments facing another year of difficult financial decisions, giving employees better ways to manage their existing responsibilities is a worthwhile place to start.
Explore Euna Solutions’ software to learn how your organization can improve budgeting, grants management, and procurement.
Frequently Asked Questions
What is the best way to learn how to modernize public sector financial operations?
Learning how to modernize public sector financial operations involves auditing current manual workflows, such as spreadsheet-based budgeting and disconnected grants tracking, while implementing purpose-built, cloud-based software solutions that centralize data across departments to improve accuracy and reduce the administrative burden on small, constrained government finance teams.
How does purpose-built software help government finance departments?
Purpose-built software replaces manual, disconnected tools like spreadsheets and emails with centralized platforms designed for budgeting, grants, and procurement. These systems automate routine tasks, improve data consistency across departments, and provide better visibility for compliance and reporting, which helps small teams manage their increasing workloads more effectively.
Why is data management critical before adopting artificial intelligence?
Data management is critical because AI tools rely on consistent, accurate information to produce reliable analysis. If an organization has disconnected legacy systems and inconsistent records, AI may struggle to provide accurate insights, potentially leading to errors that staff cannot easily verify or reconcile during sensitive financial processes.
What are the primary challenges facing public sector finance teams today?
Public sector finance teams face significant challenges including limited staff capacity, increasing compliance oversight, and the reliance on manual processes. These issues are compounded by disconnected information systems, which force employees to spend excessive time on administrative tasks rather than strategic financial analysis and long-term planning for their communities.