Digital Forensics in Public Finance: Applying Benford’s Law to Indonesian Government

Abstract

This study investigates the application of Benford's Law as a forensic tool to detect anomalies in the expenditure data of Indonesian government ministries and agencies. Utilizing transaction records from the SAKTI application for the year 2023, the research focuses on Goods Services and Capital Expenditures. The analysis employs first-digit, first-two-digit, and first-three-digit tests to identify deviations from the expected digit distributions outlined by Benford's Law. While the first-digit test indicates general conformity, suggesting minimal anomalies, the first-two and first-three-digit tests reveal significant deviations, particularly around regulatory expenditure thresholds (e.g., Rp10 million, 50 million, and 200 million). These findings suggest potential structuring of transactions to circumvent stricter oversight, highlighting the need for enhanced auditing mechanisms. The study underscores the effectiveness of Benford's Law in forensic accounting within the public sector and advocates for its integration into routine audits to bolster financial transparency and accountability.