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The South Australian government has issued a notice to its payroll provider over a data hack that saw the personal information of around 80,000 public sector employees exposed to cyber attackers.
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Payroll provider hit with breach notice over SA government hack
28 January 2022
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Payroll software provider Frontier Software has been hit with a breach notice from the South Australian government over a cyber attack last month that saw private and financial records of nearly 80,000 South Australian government employees accessed.
Department of Treasury and Finance chief executive David Reynolds told the South Australian State Parliament that the government is now taking action against Frontier over the breach.
“We have issued a breach notice to Frontier for being in breach of contract to provide payroll services in a secure environment,” he said.
Mr Reynolds said it had emerged that the data stolen in the attack was from a file that had been transferred to Frontier’s networks from the government’s payroll system.
“As we understand it, information and where matters were compromised was the information of one of their corporate servers, which was hacked by some overseas player,” Mr Reynolds explained.
“It hacked their corporate networks and, as it turned out, they had transferred a file with our staff details onto their corporate network out of our secure payroll system.
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“The file that had been transferred to their corporate network was the one that was accessed by the hacker in this instance, as we understand it.”
The ransomware attack saw significant personal information of South Australian government employees stolen, including their name, date of birth, tax file number, bank account details, remuneration, payroll period, superannuation contribution and amount of tax withheld, and had led the ATO to temporarily lock people out of their ATO online accounts.
While investigations are ongoing into what action the government might take, Mr Reynolds stated that penalties could be imposed on Frontier for not meeting contractual requirements.
“We certainly have provisions in there where they need to meet any costs associated with the implications of this for us, including third-party costs that arise for us in doing this,” he said.
“Outside of that, we are still working through what other potential contractual requirements we can put on them.”
Mr Reynolds added that the government will consider terminating the contract with Frontier, but any decision to do so would be informed by a review.
“We need to continue to have payroll services – we need a payroll provider,” he said.
“We need a payroll provider, so there is the question about the contract with Frontier, what we do with it and, if we were to stop using them, how we could transition to another provider.”
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