South Dakota turned down millions of dollars in federal cybersecurity grants and instead is spending more than $7 million in state taxpayer funds to battle what has become a constant threat of attacks on computer systems used by government, industry and individuals.
In addition to recent high-profile cyberattacks on government operations in Pennington County, Rapid City and Mitchell, the South Dakota Attorney General's Office receives frequent reports of digital information breaches.
Over the past five years, the agency has had 1,062 online security breaches reported to its Consumer Affairs Division, including 127 so far in 2026, according to agency data.
Those breaches include data hacks perpetuated on individuals, businesses and government entities, according to AG spokesman Tony Mangan, who responded to a News Watch request. State law prevents the public release of where or upon whom those breaches took place, Mangan said.
But the frequency at which data and systems are being infiltrated illustrates the increasing risk of storing important personal and government information online at a time when experts say nefarious actors are constantly trying to hack into computer systems across the U.S., including in South Dakota.
'We are always under a constant threat, and we are always mitigating something somewhere,' said Mike Waldner, director of SecureSD and Project Boundary Fence, the state's two main cyber security prevention programs. 'We always have an active case that we're working on.'
Recent cyberattacks on local governments have only heightened concerns that systems are being targeted by either organized crime groups seeking ransom or by foreign adversaries such as Russia, China or Iran, which is currently engaged in a war with the United States.
Experts theorize that Iran-backed hackers are responsible for largescale cyberattacks on communication systems in Pennington County and the city of Mitchell as well as breaches into water systems in Minnesota and possibly up to a dozen more states.
South Dakota lost out on at least $5 million and likely much more in federal funding for cybersecurity efforts by cities and counties when former Gov. Kristi Noem declined to apply for part of a $1 billion federal grant program in fiscal year 2023.
Ian Fury, a spokesman for Noem at the time, said the funding from the Biden administration was wasteful and required the state to use one-time funding to create a longterm program.
Instead, state lawmakers allocated $7 million to cybersecurity prevention efforts that include SecureSD and the Project Boundary Fence, both programs aimed at preventing and mitigating hacks on state, county and local governments as well as utilities.
Gov. Larry Rhoden on Aug. 11 appropriated $500,000 in Future Fund money to the South Dakota Department of the Military to boost efforts of the Governor's Resilience and Infrastructure Task Force, of which cybersecurity is one objective.
The first high-profile cyberattack on a municipal government in South Dakota took place in Brown County in August 2021. More recently, in October, someone working in Tripp County government was caught up in an email 'phishing' scam and mistakenly sent more than $826,000 in taxpayer money to a fake account.
The South Dakota Division of Criminal Investigation is working with federal agencies on an investigation into the incident, the release said. To date, the funds have not been recovered.
Rapid City technology staffers quickly contained an attempted hack on a sewage lift station monitoring system in late July, IT director Jim Gilbert said. Gilbert said the city computer system has redundancies built in to notify system regulators and stave off implications of attacks if they occur.
For the past few years, the state has funded two separate but aligned efforts to prevent cybersecurity attacks under the auspices of Dakota State University in Madison.
SecureSD and Project Boundary Fence are voluntary programs to combat cyber attacks and data breaches at municipalities, counties, and nonprofit entities providing drinking water and sewer utilities across the state.
'We're trying to build that cybersecurity culture and secure what we call the 'human firewall,'' Waldner said. 'Like it or not, as a government employee, you are under constant threat, and the expectation from citizens is that you are protecting their data and information like they expect it to be protected.'
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