AI-DRIVEN ACCOUNTABILITY IN PUBLIC FINANCIAL MANAGEMENT: DETECTING PROCUREMENT LEAKAGES AND ENHANCING TRANSPARENCY

ABSTRACT

Public financial management (PFM) systems in emerging economies face persistent challenges, including procurement leakages, weak oversight, and limited audit coverage. This study examines the use of artificial intelligence (AI) to enhance financial oversight through automated detection and predictive analytics. Findings indicate that AI significantly improves performance, increasing detection rates from about 20% to over 60% and expanding audit coverage from below 10% to nearly 80%. AI tools such as anomaly detection, network analysis, and natural language processing are particularly effective in identifying high-risk activities like bid rigging and inflated contracts. However, challenges including algorithmic bias, limited transparency, and institutional capacity constraints remain. The study concludes that while AI enhances efficiency and oversight, its effectiveness depends on strong governance frameworks that ensure accountability, fairness, and transparency.

Keywords - Artificial Intelligence, Public Financial Management, Procurement Leakages, Algorithmic Accountability, Expenditure Transparency.