Deloitte will provide a partial refund to the Australian federal government after a $440,000 report it produced contained multiple errors, including fabricated references, partly due to the use of generative artificial intelligence. The Department of Employment and Workplace Relations (DEWR) confirmed the consultancy firm would repay the final instalment under its contract, with the amount to be made public once the transaction is finalised.
The report, commissioned in December 2024, reviewed the department's targeted compliance framework and its IT system, which automates penalties for jobseekers who fail to meet mutual obligations. It identified widespread issues, including a lack of traceability between the framework's rules and legislation, as well as system defects, describing the IT system as 'driven by punitive assumptions of participant non-compliance'.
Originally published on 4 July, the report was re-uploaded on Friday after the Australian Financial Review reported in August that it contained errors such as nonexistent references and citations. Dr Christopher Rudge from the University of Sydney, who first flagged the issues, said the report contained 'hallucinations' where AI models fill in gaps or misinterpret data. He noted that the updated version replaced fake references with new ones but still contained several inaccuracies.
Deloitte acknowledged using generative AI in an appendix of the updated report, stating it employed a large language model tool chain licensed by DEWR. However, it did not attribute the errors to AI in the original version and maintained that the substantive findings and recommendations remain unchanged. A Deloitte spokesperson said 'the matter has been resolved directly with the client'.
Labor Senator Deborah O'Neill criticised the firm, saying 'Deloitte has a human intelligence problem' and that a partial refund 'looks like a partial apology for substandard work'. She suggested procurers might be better off with a ChatGPT subscription than hiring big consulting firms. The Australian Financial Review also reported that the original document included a made-up reference to a robodebt court case, which Deloitte corrected in the updated version.
