Public administration is transforming due to the need for evidence-based governance and digital technologies. This review focuses on business intelligence (BI) and data dashboarding tools as key enablers of this shift in small municipalities. While larger cities use advanced data analytics, smaller local governments have unique challenges and opportunities. This paper synthesizes literature on how BI solutions convert municipal data into actionable insights for better decision-making, efficiency, and citizen engagement. A thematic analysis explores applications like enhancing public service, promoting fiscal transparency, and integrating predictive analytics. The review also assesses obstacles for small municipalities, including resource limits, infrastructure deficits, and the need for data literacy. By mapping public sector dashboards' evolution and application in resource-constrained settings, the paper highlights their role in modernizing local governance. It concludes by identifying research gaps in scalability, security, and sustainability, proposing future longitudinal and comparative studies. This review is a foundational resource for understanding and implementing data-driven strategies for responsive, transparent, and effective local governance.