S.C. Revenue Department Wants Annual Funding for Security

After the nation’s largest state-agency security breach, the agency wants $3.5 million in 2014-15 to develop its new chief security information officer’s team, among other things.

The South Carolina Department of Revenue says it is moving 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 to spend $40.5 million for a new tax-processing system over the next four years.

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

New security officers are testing agency 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 the security of its system.

“Their information is substantially safer than where it was before,” Revenue Department director Bill Blume said after speaking to an 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.

The agency wants $3.5 million in 2014-15 to develop its 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 since the breach, including a second year of credit monitoring for hacking victims.

The Revenue Department has gone through an upheaval since the breach. Only one of the four agency officials making Tuesday’s presentation has worked with the department for more than a year.

The agency also is asking for $14 million to start making over its 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.

The new processing system will come from an outside company, rather than the agency trying to develop its own customized system, which would cost about $130 million, Blume said. The state already has spent about $35 million on the customized 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,” said Rep. Gary Simrill, R-York.

The Revenue Department, meanwhile, wants $4.3 million to improve its current computer tax system.

©2014 The State (Columbia, S.C.)

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