POLITICS: SC DOR looking to move on from data breach

Posted by ANDREW SHAIN on January 14, 2014 

Computer-Internet Security


— The S.C. Department of Revenue is working to move forward after the nation’s largest data security breach at a state agency.

The department asked a state budget subcommittee Tuesday for annual funding of security measures for the first time and spend $40.5 million for a new tax processing system over the next four years.

The agency has been training employees and improving security since hackers stole personal information belonging to 6.4 million taxpayers, their children and businesses in 2012.

New security officers are testing employees by sending emails that appear to be legitimate with links that can allow dangerous viruses and program into agency systems. That is how the hackers entered the revenue department system. The agency also is using former hackers to test system security.

“Their information is substantially safer than where it was before,” director Bill Blume after speaking to a S.C. House subcommittee.

But all the millions spent on locking down information cannot keep away all crooks, Blume said.

“Are we free from getting breached? No, we can always get breached. Target gets breached,. … Everybody gets breached,” he said. “If we’re breached, we’re trying to limit that. So can I limit it to100 people? That’s a risk I’m willing to take.”

The agency is seeking $3.5 million for 2014-15 to develop the new chief security information officer’s team, add security training for employees and contractors, bolster network monitoring and disaster recovery and improve encryption, Blume said.

The state has dedicated more than $20 million to fix security problems after the breach including another year of credit monitoring for hacking victims.

The revenue department has gone through an upheaval since the breach. All but one of the four agency officials making the presentation Tuesday has worked with the revenue department for more than a year..

The agency is asking for $14 million to start making over the tax processing system over the next four years. The project will cost $48 million by 2018-19 -- including $7.5 million left over from last year.

A new taxpayer system will come from an outside company rather than the agency trying to develop its own, which would cost about $130 million, Blume said. The state has spent already about $35 million on the custom system, some of which is being used and some of which should be compatible with the new project, revenue department officials said.

The off-the-shelf system also will be more secure, he said.

“They have already said, ‘These are the best practices,’ ” Blume told lawmakers. “If something needs to be changed, it will be changed. They are in the profit mode.”

Legislators were supportive. “Technology outpaces what we need to do,” Rep. Gary Simrill, R-York, said.

The revenue department, meanwhile, wants $4.3 million to improve the current computer tax system.

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