My question, if this has been done through bitcoin or any other cryptocurrency what'll be the remedy. Here atleast some amount is being recovered, as the transactions were made through a centralised banking services. This way does governments encourage the usage of cryptocurrencies in the future on official needs.
If this fund distribution was sent via cryptocurrency, I think it will be more transparent and the Government could have mitigated such fraud at the soonest possible time, but I doubt it since the delivery mode of funds is not the real issue here but its the malicious acts of Government officials who have connived to make this fraud possible.
As with any Government financial transaction, checks and balances should be always implemented and audits should be done honestly by officials with utmost integrity. Also, any form of corruption should be dealt with harshly to discourage other people from doing the same thing all over again. Imho.