A Squid forward proxy can be a controlled egress gateway or an open relay into internal networks. The difference is configuration. Squid evaluates http_access rules in order, and the first matching rule decides the request. An early allow for a broad source network can make a later authentication check irrelevant.
Build the decision chain
Start with a final deny all and add allow rules for named networks, authenticated groups and required destinations. Keep the rules small enough to explain. A proxy_auth ACL challenges the client when the request reaches that rule, so authentication should appear before any broader allowance that would bypass it.
The http_port documentation includes a NP option that disables authentication on a listening port. That may be appropriate for a tightly controlled reverse-proxy listener, but it is a poor default for a forward proxy used by people or untrusted workloads. Verify which listener accepts CONNECT requests and whether the authenticated identity is available to the later ACLs.
Restrict destinations and protocols
Limit allowed HTTP and HTTPS destinations to business needs. Block cloud metadata endpoints, loopback addresses, management networks and link-local ranges. For CONNECT, restrict destination ports rather than permitting arbitrary tunneling. An allowlist of hostnames is stronger when DNS resolution and validation happen at request time and the proxy does not accept a client-controlled alternate destination after the check.
Review helper programs that supply external ACL decisions. Treat their input and output as security-sensitive, restrict their file and network access, and test failure behavior. If the helper times out, the safe result is denial, not a permissive fallback.
Inventory and test
List each proxy listener, source network, authentication helper, allowed destination group, cache policy and log destination. Test anonymous access from an approved and an unapproved network. Test a valid user against a blocked destination and an invalid user against an allowed destination. Confirm that the final deny rule is reachable.
Cache and logs can retain URLs, hostnames or content metadata. Limit access to proxy logs and define retention. Do not place credentials in URLs or custom headers that the proxy records. Review whether authenticated responses can be stored in shared caches.
After an open-proxy report, remove the broad rule, rotate any exposed helper credentials and inspect logs for requests to metadata, internal administration or unusual CONNECT destinations. Then repeat the tests from outside the expected network, because that is where the effective policy matters.