All state governments dispose of large numbers of older computers each year, and while they all have procedures in place to scrub sensitive data from the hard drives before releasing them, there have been reports of slip-ups. An audit conducted last summer on computers approved for sale or donation by Washington state found that 9% still contained sensitive information such as Social Security numbers and health data including psychiatric records. Washington releases as many as 10,000 older computers each year. Since the audit, the state has changed how it processes computers destined for disposal including submitting them to an additional scrubbing procedure.
See full Consumerist article at “Washington State Sold Computers Loaded With Sensitive Personal Information,” as well as additional coverage at Spokesman-Review (Spokane, WA) and Govtech.com.