A cyber attack that impacts municipal financial systems will stop the flow of business.
Municipalities are businesses. Their customers are the citizens who pay taxes and fees to live in the community, use the schools, and receive services like trash pickup, running water, and sewer connections. As stewards of public funds, municipal officials are responsible for overseeing tax collection, investments, maintenance of free cash, bill payments, regulatory reporting, and the electronic transfer of funds.
Often, because of limited resources, the balance between revenue collection and expenditures is delicate in the world of municipal finance. A cyber attack that impacts municipal financial systems will stop the flow of business, potentially draining funds meant for community initiatives and services for citizens.
|For Baltimore, the cost of doing business in the age of ransomware is estimated to be $18.2 million.|
When Baltimore fell victim to ransomware attack in May of 2019, they refused to pay the hacker's demand of about $76,000 in bitcoins. By the end of the month, the city said it expected to spend almost $10 million in recovery efforts before the year was out. With the city's credit card systems knocked offline this brought the property market to a halt, officials estimated another $8.2 million as the impact from lost or delayed revenue. To offset the $18.2 million impact, the city voted in August to transfer $6 million from a parks and public facilities fund to cover IT expenses associated with recovering from the attack.
|Galveston County, Texas - a case of Business Email Compromise...$525,000 lost|
In June 2018, Galveston County, Texas, fell victim to a scammer who posed as a road contract company and said they had changed their bank account number and to send future payments to the new account number. Galveston County officials sent $525K in digital payments to the new account, not realizing it was fake until the legitimate company called to inquire about the missing payments. More than 6 months later, the funds were not recovered and the thief has not been caught.