The Committee on Public Finance (COPF) today released its final report into the USD 2.5 million cyber fraud linked to Sri Lanka’s foreign debt repayments to Australia, highlighting widespread governance, procedural and operational failures and recommending sweeping reforms.

Key findings from the report:

1. USD 2.5 million stolen – The report concludes that a cybercrime-linked fraud resulted in the loss of USD 2.5 million in public funds during foreign debt repayments to Australia. 
2. Senior officials held responsible – COPF says governance lapses at the level of the Secretary to the Treasury and the Central Bank Governor contributed to the failures that allowed the fraud to occur. 
3. Outdated email system exposed Treasury – The Ministry of Finance was using an outdated Microsoft Exchange Server after security support had ended, while basic cybersecurity measures, including multi-factor authentication, were absent. 
4. Fraud attempts involved multiple countries – The COPF report reveals that suspicious or fraudulent payment instructions were identified in connection with Sri Lanka’s debt repayments involving India, the UK, Germany and Belgium, helping authorities prevent further losses. The USD 2.5 million cyber fraud occurred only in repayments to Australia.
5. Basic verification failures identified – Officials failed to verify lender email domains, relied on unverified email communications and lacked effective internal controls, allowing the fraud to continue for months. 
6. Only four officials suspended – Despite finding system-wide failures across multiple institutions, the report notes that only four mid-level Ministry of Finance officials have been suspended so far. 
7. Special audit and reforms recommended – COPF has called for a special audit of the entire foreign debt repayment process, stronger cybersecurity across government institutions, updated financial regulations and improved public debt management systems. (Newswire)

The post Explained: 7 biggest findings from COPF’s $2.5m cyber fraud report appeared first on Newswire.

The Australian High Commission in Sri Lanka has confirmed that both the mission and Sri Lanka’s Ministry of Finance are aware of irregularities in payments owed to the Australian Government.

Sri Lankan authorities have launched an investigation into the matter and are coordinating closely with Australian officials, who are assisting the inquiry, the Australian High Commission said in a statement on ‘X’. 

The High Commission further said that Australia remains committed to supporting Sri Lanka’s path toward debt sustainability.

The statement comes after Deputy Minister of Finance Dr Anil Jayantha announced that complaints have been filed with law enforcement agencies following a cyber theft incident involving unauthorised access to the computer system of the Department of External Resources under the Ministry of Finance.

He said the incident occurred during communication and fund settlement activities between the Australian Export Finance Agency and the Treasury, where both parties exchanged information via email. 

Hackers allegedly exploited this communication channel to manipulate the information exchange,he said, adding that the fraud came to light after a similar attempt was made to obtain additional funds linked to a payment due to India. 

He further said that suspicion arose when changes were detected in account numbers. Following this, the Treasury immediately alerted the Sri Lanka Police Computer Crimes Investigation Division and the Sri Lanka Computer Emergency Response Team (CERT), after which a lengthy investigation was then carried out tracing communications back to the start of discussions on debt restructuring and repayments.

This established that money intended for the Australian Export Finance Agency had been diverted into accounts controlled by the hackers. A complaint has since been filed with the Criminal Investigation Department (CID), and investigations are ongoing, Deputy Minister of Finance Dr Anil Jayantha added. (Newswire)

The post Australia confirms payment irregularities as Sri Lanka probes cyber fraud appeared first on Newswire.