Deloitte to repay final AU$440k due to AI-generated report errors

Deloitte Australia has agreed to repay the final installment of a AU$440,000 government contract after a report it prepared for the federal Department of Employment and Workplace Relations contained multiple inaccuracies that the firm attributed to the use of generative artificial intelligence. The review, commissioned in December 2024 and published in July, assessed an automated compliance framework used to apply penalties to welfare recipients; the department said the substantive findings and recommendations of the report remain unchanged despite the errors.

The department confirmed this week that Deloitte acknowledged incorrect footnotes and references in the report and will reimburse the outstanding payment once the transaction is finalised. The revised document, reuploaded after errors were flagged in August, includes a disclosure that a generative AI language system was used during drafting and corrects or removes a number of previously cited items that could not be verified.

The inaccuracies identified by a University of Sydney researcher included fabricated citations to academic work, references to nonexistent reports, and a quoted passage attributed to a federal court...