The federal grant landscape is a complex, large-dollar enterprise with many stakeholders and challenges. According to the U.S. Office of Management and Budget, in fiscal year 2024, the federal government obligated roughly $1.2 trillion in grants to support national priorities. Such grants fund a myriad of policy initiatives such as transportation, health care, education, job training, social services, community development, and environmental protection.
In 2023, the U.S. Government Accountability Office (GAO) testified before the U.S. Senate Committee on Homeland Security and Governmental Affairs on challenges in federal grants management. Many of these challenges remain, including:
- Capacity—financial and resource issues make it harder to access grants
- Streamlining—burdensome requirements for managing grants make programs more expensive
- Transparency—better public reporting of how grants are spent would improve government accountability
- Oversight—agencies should make sure that grants are awarded and used as intended
You can read the full GAO report here.
Where do we go from here?
As an intrepid oversight professional, I am always on the lookout for pragmatic solutions to topics I review. As such, earlier this week I attended a FedInsider webinar on the federal grant management process, where government and industry grant professionals delved into these challenges. My takeaways on grant management from the perspectives of grantors and grantees focused on AI and are highlighted below.
Bottom-line: Improving grant management—like many modern program challenges—is a multifaceted issue involving topics such as governance for results, administrative streamlining, technology, process reengineering, and finance. AI can serve as a tool in this toolkit.
Suggestions to alleviate grant management challenges included use of AI to enhance the Grantor and Grantee user experience
As with many operations today, AI entered the conversation. There is a reasonable predisposition to view AI usage as a threat. However, there are structured and methodical ways to frame the growing use of AI.
At the federal level, the environment has shifted toward broader AI adoption in government. In 2025 the Office of Management and Budget issued guidance aimed at accelerating use of AI and driving more efficient AI acquisition, signaling a more active posture toward public-sector use.
Government grantors face a challenging reality–increased workloads and static or diminished staff resources. AI offers opportunities throughout the grant lifecycle, such as:
- Lower administrative burdens by reallocating resources to higher-value strategic objectives
- Interpretation of regulations and legal guidelines into user-friendly formats.
- Improved consistency in scoring and decision-making, reducing subjectivity and bias. AI tools can enhance the review process by providing consistent screening of basic eligibility and alignment with funding priorities
- Enhance consistency of reporting and analytics enabling better program evaluation and data-driven decision-making. AI tools can extract insights from performance data, helping organizations assess the effectiveness of their grants..
- Automation of compliance checks and reviews so applications can be screened for completeness and accuracy in record time.
- For grantees, AI can auto-suggest answers to frequently asked questions in grant applications and proposals. This allows grantees to quickly fill out applications by retrieving previously used responses, saving time and effort. By centralizing past responses, grantees can easily access and reuse information across multiple applications.
While AI can aid agencies in reviewing grant applications, a human touch is still essential and needed to verify grantee application and project progress and payment information with third parties, such as:
- SAM.gov, the official U.S. government e-procurement system that collects, validates, and shares supplier data with federal agencies for contracting and grants.
- U.S. Department of the Treasury’s Bureau of the Fiscal Service’s DoNotPay portal, a web-based tool that allows federal agencies to verify the eligibility of individuals or organizations seeking federal funds, helping to prevent improper payments and fraud. It provides access to multiple databases to ensure that payments are made only to eligible recipients.
Closing Thoughts
AI use for grant management is in its early stages.
AI can enhance grant management by automating application processing, improving decision-making, and reducing administrative workloads. This can promote more efficient operations and better data integrity for both agencies and grant applicants. Automation using AI can minimize human errors, leading to more reliable outcomes. While AI offers numerous benefits, challenges to consider going forward include:
- Human Factors: Ensuring that needed officials and staff perform validation of AI-generated data and information.
- Ethical Considerations: Are AI systems are free from bias to ensure fair grant distribution.
- Data Quality Issues: AI systems depend on high-quality data to function effectively. Poor data can lead to inaccurate insights.
- Integration with Legacy Systems: Many organizations use outdated systems that may not be compatible with new AI solutions.
How is your organization navigating challenges related to AI implementation?
Note: The views in this article are my own, not my employer’s.
