Rutgers researchers revolutionize governmental accounting with AI

Over 200 accounting professionals and public financial management leaders registered for the Rutgers Annual Governmental Accounting & Auditing Update Conference and live webcast, the largest in the state and running continuously at Rutgers Business School since 1992.

The day-long conference showcasing innovation, policy, and technology was hosted by the Center for Governmental Accounting Education & Research (CGAER), with the support of the Bloustein Local, a Unit of the Center for Urban Policy Research.

Irfan Bora, associate professor of professional practice and director of the Online Master of Accountancy in Governmental Accounting, and Marc H. Pfeiffer, senior policy fellow, the Bloustein Local, a Unit of the Center for Urban Policy Research, emceed the conference. 

After welcoming remarks from Professor Bora and Dr. Shen Yeniyurt, vice dean of Academic Programs & Learning Assurance, Rutgers Business School, Tariq Shabazz, acting director of the NJ Office of Management and Budget, opened with a comprehensive overview of New Jersey's fiscal health and future priorities.

Josh Winfrey, executive director of NASACT, discussed national trends and challenges facing state auditors and comptrollers, and Michael F. Rogers from the NJ Division of Local Government Services provided critical updates on new laws and oversight initiatives. A panel led by Marc Pfeiffer and other municipal finance leaders explored the next steps for New Jersey's Financial Automation Submission Tracking ("FAST") system and innovations in county/municipal budgeting. NJ State Comptroller, Kevin Walsh, highlighted his office's work in addressing state regulations and guidelines regarding procurement and other areas in municipal government administration.

During the AI Applications in Governmental Accounting and Auditing panel, Dr. Hussein Issa, associate professor with tenure in the Department of Accounting & Information Systems at Rutgers Business School, provided context and background for three former and current doctoral students who showcased cutting-edge research on artificial intelligence and automation in public sector accounting.

The solutions promise to transform governmental accounting, potentially saving thousands of hours and millions of dollars in processing costs.

Dr. Huaxia Li, now at the University of Michigan-Dearborn, showcased a system that audits government payroll by automatically extracting information from official documents. Tested in Brazil's Santa Catarina state, which employs over 175,000 workers, the system reduced processing time from three minutes to under 30 seconds per transaction while achieving 96% accuracy. "This enables full population testing instead of just random sampling," Li explained.

Dr. Shaoyu Liu from Indiana University presented an intelligent automation framework to the Government Finance Officers Association, which reviews thousands of financial reports annually. By combining robotic process automation with AI language models, the system cut review times in half and reduced costs by 70%, from $6 to approximately $2 per report. "The AI acts as the brain while automation serves as the arms," Liu said.

Melissa Dardani, a current Rutgers PhD candidate, demonstrated an autonomous AI agent system for procurement that processes data from multiple sources. Her five-agent system includes features for price validation, anomaly detection, and real-time insights, handling over 1,300 data attributes across 29 tables.

Professor Issa closed the panel discussion by emphasizing the importance of measured development: "We're building secure building blocks to ensure rapid AI advancement doesn't compromise accounting standards." All systems maintain human oversight for final decisions, addressing concerns that AI will replace accountants rather than augment their capabilities.

The research is accessible through the Rutgers Accounting Research Center's website, with some presentations available through the university's Rutgers Stackable Business Innovation Program (rSBI).

The conference underscored Rutgers' leadership in advancing governmental accounting education, research, and practice, while fostering dialogue on technology, policy, and fiscal responsibility.

-Sean Ireland