Deloitte’s AI $440k Report Flawed, Repays Australian Govt

Deloitte’s $440,000 report, produced using generative AI, contained errors, prompting the tech company to reimburse part of its payment to the Australian government. The Department of Employment and Workplace Relations (DEWR) is now awaiting the final payment for the A$439,000, approximately US$290,000 contract, as confirmed by The Guardian.

Labor senator Deborah O’Neill criticized Deloitte’s AI-drafted report on Australia’s welfare penalty system, costing $440,000, as a “partial apology for substandard work.” Hired in December 2024 by the Albanese government, Deloitte’s review of the Targeted Compliance Framework’s IT system led to refund demands, according to The Guardian.

According to the Guardian, Deloitte’s seven-month, AI-assisted review costing $440,000 and published on July 4, revealed problems with a flawed welfare penalty system. It uncovered weak links between rules and laws, described as “system defects,” and found that the IT infrastructure was impacted by punitive assumptions, resulting in a partial refund to Australia’s government.

The Australian Financial Review revealed significant errors in Deloitte’s $440,000 AI-generated report, including false academic citations and a fabricated court case, Deanna Amato v Commonwealth. Dr. Christopher Rudge from the University of Sydney referred to these mistakes as “hallucinations,” emphasising AI’s tendency to make flawed guesses, according to The Guardian.

Dr. Christopher Rudge criticized Deloitte’s $440,000 AI-generated report for replacing one fake reference with many fabricated ones, suggesting unsupported claims. The Guardian reported that DEWR uploaded a corrected version on Friday, removing over a dozen nonexistent citations, correcting typos, and updating the reference list, while affirming that the report’s main findings and recommendations remained unchanged.

Deloitte’s $440,000 report appendix admits using Azure OpenAI GPT-4, licensed by DEWR, but avoids blaming AI for errors. Deloitte maintains that its conclusions remain unchanged, with a spokesperson stating that the issue is resolved with DEWR.

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Senator Deborah O’Neill criticized Deloitte’s dependence on AI in its flawed $440,000 report, describing it as a “human intelligence problem” and dismissing their partial refund as a “partial apology for substandard work.” She advised government agencies to carefully examine who or what is responsible for their paid work, joking that they might perform better with a ChatGPT subscription.

DEWR stated that refund transactions and contract details will be publicly displayed once the transactions are completed.