Applicability of Benford’s Law to Compliance Assessment of Self-Reported Wastewater Treatment Plant Discharge Data

Abstract

The United States (U.S.) environmental regulatory system relies heavily on self-reports to assess compliance among regulated facilities. However, the regulatory agencies have expressed concerns regarding the potential for fraud in self-reports and suggested that the likelihood of detection in the federal and state enforcement processes is low. In this paper, we apply Benford’s Law to three years of self-reported discharge parameters from wastewater treatment plant facilities in one U.S. state. We conclude that Benford’s Law alone may not be a reliable method for detecting potential data mishandling for individual facility–parameter combinations, but may provide information about the types of parameters most likely to be fraudulently reported and types of facilities most likely to do so. From a regulatory perspective, this information may help to prioritise potential fraud risks in self reporting and better direct limited resources.

Testing the emission reduction claims of CDM projects using the Benford’s Law

“…Recently, Beiglou et al (2017) use BL to examine wastewater discharges in Ohio. Data are taken from 223 facilities and cover a period of 3 years.…”

Representativeness of Knowledge Bases with the Generalized Benford’s Law

“…If the distribution of the first significant digit of some numerical dataset does not satisfy Benford's law, then the data is assumed to be faulty. For this reason, Benford's law is regularly used to detect frauds in various kind of data: in accounts [23], in elections [19], or in wastewater treatment plant discharge data [3]. However, in all of these cases, Benford's law is used only to estimate the correctness of the data -not its completeness.…”