States tap cybersecurity grants; DHS releases money from 2004 budget

Terry Takai, Michigan's chief information officer

As part of an ongoing statewide computer security audit, Florida decided to hack into the network of one of its 38 agencies last year to gauge the agency's information security vulnerabilities. To breach the network, the state technology office hired a company to train a select group of employees to perform the task.

This kind of self-inflicted computer attack, known as ethical hacking, shows the agency how a hack occurs and what can be done to prevent future attempts to breach security.

"It's one you know is coming and that you can learn from," said Mike Russo, chief information security officer for the Florida State Technology Office. "We wanted to make sure that [our systems] were hardened."

Florida's ethical hacking exercise, which was overseen by the state technology office, is one of the more creative ways states are strengthening their systems and closing security gaps. With states facing the third straight year of flat budgets, it hasn't been easy for them to implement new security measures.

But this fall, the Department of Homeland Security began allowing states to use a portion of the $2.2 billion in fiscal 2004 federal grants for cybersecurity. The money is first given to the states, which must pass along 80 percent of the funds to local government within 60 days after the grant award.

This is the first time DHS has allowed the grant money to be used for cybersecurity, said Chris Dixon, digital issues coordinator for the Lexington, Ky.-based National Association of State Chief Information Officers. Previously, most homeland security grants went to first responders.

Under the State Homeland Security Program, states can apply for grants to cover costs related to the purchase of specialized equipment for cybersecurity as well as the design, development and conduct of training programs and exercises, according to DHS' Office of Domestic Preparedness.

Despite tight budgets, state technology offices have made significant progress toward improving information security, according to analysts and industry observers. They have addressed security from an enterprise rather than an agency-specific standpoint and by taking basic security steps, such as constructing firewalls, installing and testing intrusion prevention software and conducting Web filtering and e-mail monitoring.

States routinely purchase products from companies specializing in information security, and receive alerts and notices pertaining to information security from them as well.

Security companies can expect to see continuing demand for products and solutions that address critical incident response, technology watch and technology audits and penetration tests, according to analysts and state officials. The areas most likely to spawn large technology projects are business continuity and disaster recovery, they said.

In Arizona, state officials want to develop an enterprise security office that would make security policies and procedures uniform across more than 100 agencies, said Jim Ryan, homeland security technology manager with the Arizona Government Information Technology Agency.

"IT vulnerability is increasing exponentially," he said. "Every agency needs to be on the same security requirements."

Michigan performed one of the most comprehensive security initiatives. The so-called Secure Michigan Initiative was a five-step project designed to take the state government from a rapid risk assessment to a strategic plan to correct existing gaps and vulnerabilities. The project won the 2003 National Association of State Chief Information Officers Recognition Award in the Security and Business Continuity category.

State officials have been forced to think of creative ways to work with the private sector on computer and network security matters because of the state budget crisis, said Teri Takai, Michigan's chief information officer. "Given the budget situation, we've done as much as we can without putting out new contracts," she said.

For now, Michigan wants to piggyback some of its major security initiatives into other technology projects, she said. For example, the state intends to bundle its disaster recovery requirements into its infrastructure consolidation initiative, she said.

Florida's ethical hacking approach was one of the ways the state is coping with computer security on a shoestring budget, said Kim Bahrami, Florida's chief information officer. The Florida State Technology Office spends about $2 million annually on information security, which is less than most other states, she said.

Florida Gov. Jeb Bush supported the ethical hacking project because it helped the state meet its security objectives without hiring additional employees, she said.

"Gov. Bush believes it is important to address security issues by taking an out-of-the-box approach," she said. "Security does not mean a huge employee buildup."

Florida's experience with ethical hacking changed the way security personnel watch and monitor state computer networks, Russo said. One of the most noticeable changes was that it pushed the state toward intrusion detection and prevention systems.

Ethical hacking "will always be part of our security strategy," he said. "How we use it and when we use it will be determined as we move along. It is one of those pieces [of our strategy] that we will use from time to time."

Staff writer William Welsh can be reached at wwelsh@postnewsweektech.com.

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