Education & Government
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Jill Holtz
Content Strategy Manager

Performing cyber risk assessments: what public sector auditors should know

August 31, 2023
0 min read
Performing cyber risk assessments: what public sector auditors should know

As cybersecurity risks continue to grow in the public sector, so does audit’s role in helping to mitigate those risks. And, as the range of attacks and threat actors evolve, so too must the defenses put in place to counter them. Your public sector audit team can become a vital weapon in your organization’s fight against cybercrime.

Between March 2022 and March 2023, the average cost of a data breach for public sector organizations was $2.6 million, while in education the cost was even higher — an eye-watering $3.6 million, according to the IBM Cost of a Data Breach Report 2023.

Cybersecurity isn’t the sole responsibility of your security or IT team — it impacts and involves all areas of the organization. By using a common risk language across departments and with individuals, auditors can better evaluate the effectiveness of your cybersecurity program and get an accurate picture of where your organization stands.

Cyber risk assessments are critical to help establish baselines for risks, compliance and data integrity.

Why do cyber risk assessments matter in the public sector?

The increasing importance of cyber risk assessments in the public sector can be attributed to several key factors:

Digital transformation: Government agencies have undergone significant digital transformation, relying on technology to deliver services, store sensitive data, and manage critical infrastructure. This increased reliance on digital systems has exposed these entities to a wide range of cyber threats.

Data sensitivity: Public sector organizations handle vast amounts of sensitive citizen information, ranging from personal identification details to financial records. The compromise of such data can lead to identity theft, fraud, and significant privacy concerns.

National security: Government agencies play a crucial role in maintaining national security. Cyberattacks targeting public sector entities can disrupt critical infrastructure, compromise defense systems, and even impact law enforcement capabilities.

Service disruption: Cyber incidents can disrupt public services, affecting citizens' access to essential programs, benefits, and information. Service disruptions erode public trust and can have lasting political and social consequences.

Regulatory compliance: Public sector entities are subject to various regulations and compliance frameworks that mandate cybersecurity measures. Failing to comply with these requirements can result in legal repercussions and reputational damage.

Economic impact: Cyber incidents can have significant economic implications, both for governments and citizens. Remediation costs, legal fees, and economic losses due to downtime or data breaches can strain public finances.

Public trust: Maintaining public trust is vital for government entities. Demonstrating a commitment to robust cybersecurity practices reassures citizens that their information and interests are safeguarded.

Cyber insurance and risk management: As the financial impact of cyber incidents becomes clearer, public sector organizations are increasingly looking into cyber insurance options. Effective risk assessments are essential for accurately determining coverage needs and premiums.

Accountability and transparency: Government entities are under increasing pressure to be transparent and accountable. Demonstrating due diligence in identifying and mitigating cyber risks helps fulfill these obligations.

The rising dependence on technology, the sensitivity of data handled, the potential consequences of cyber incidents, and the changing threat landscape collectively underscore the imperative for robust cyber risk assessments in the public sector.

The role of audit teams in identifying and mitigating cyber risks

The role of a public sector audit team in identifying and mitigating cyber risks is multifaceted and critical in safeguarding government entities and the public they serve. The audit team's involvement extends beyond financial audits to encompass cybersecurity assessments, ensuring that digital systems and sensitive data are adequately protected. Here's how they contribute:

Risk assessment and prioritization

Audit teams can evaluate the cyber risk landscape, identifying vulnerabilities and potential threats. They can also prioritize risks based on potential impact and likelihood of occurrence, allowing for targeted mitigation efforts.

Technical evaluation

Collaborating with IT experts, audit teams can assess technical aspects of cybersecurity, such as network infrastructure, software vulnerabilities, and access controls. This ensures a comprehensive understanding of potential weak points.

Compliance verification

Audit teams can verify compliance with relevant cybersecurity regulations, standards, and policies. This ensures that public sector organizations are adhering to established guidelines for data protection and system security.

Security controls assessment

Audit teams will evaluate the effectiveness of security controls and measures in place. They can analyze whether safeguards like firewalls, intrusion detection systems, and encryption adequately protect against cyberthreats.

Incident response plan evaluation

Audit teams are able to measure the preparedness of government entities to respond to cyber incidents. They can review incident response plans, testing their viability in addressing and mitigating potential breaches.

Third-party risk assessment

Many public sector entities rely on third-party vendors and contractors. Audit teams can assess the cybersecurity practices of these external partners, ensuring that their operations do not introduce additional risk.

Data protection analysis

Public sector organizations handle sensitive citizen data. Audit teams are able to scrutinize data protection measures, ensuring compliance with privacy regulations and minimizing the risk of data breaches.

Recommendations and guidance

Based on findings, audit teams can provide actionable recommendations for improving cybersecurity posture. They offer guidance on specific measures to strengthen security controls and mitigate identified risks.

Training and education

Audit teams can promote cybersecurity awareness and education within government entities. Training programs help staff recognize and respond to potential threats, enhancing overall security awareness.

Monitoring and follow-up

Audit teams may engage in ongoing monitoring to track the implementation of recommended security measures. Regular follow-up assessments can help ensure sustained improvements over time.

Transparency and accountability

Audit reports communicate cyber risk assessments, findings, and recommendations to relevant stakeholders, fostering transparency and accountability within the public sector.

Continuous improvement

As the cyberthreat landscape evolves, audit teams play a role in continuously improving their assessment methodologies. They can adapt to new threats, technologies, and best practices to ensure effective risk mitigation.

In essence, the public sector audit team acts as a critical line of defense against cyberthreats, providing an independent and objective assessment of an organization's cybersecurity measures.

By identifying vulnerabilities, recommending improvements, and supporting the implementation of safeguards, they contribute to the resilience of government entities in the face of evolving cyber risks.

Adopting a risk-based approach

Taking a risk-based approach also lets audit teams in government and education meet expectations set by executive leadership. They can also help identify major tactical and strategic gaps in cybersecurity governance.

Download our public sector cyber assessments checklist to find out how you can use a cyber risk assessment to generate a list of cybersecurity gaps and provide your organization with a road map for short- and long-term remediation activities.

Solutions such as the Diligent Audit Management Solution and ACL Analytics automate control testing and centralize workflows, allowing teams to get more done in less time while they focus on identifying vulnerabilities and mitigating cyber risk.


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