Deloitte to partially refund Australian govt after using AI in $440,000 report

Deloitte has agreed to refund a portion of a nearly $440,000 payment to Australia’s Department of Employment and Workplace Relations after a welfare IT review it produced has been found to contain multiple errors stemming from AI‑generated material.

The department has said the corrected report has not changed the substance of its recommendations.

The consultancy’s assurance review examined the Targeted Compliance Framework and the supporting IT system that automates penalties for jobseekers who miss obligations.

After publication in July 2025, readers identified problems including non‑existent academic references and an inaccurate account of a Federal Court decision. A revised version has since been posted with corrections and clarifications.

How have the errors come to light?

University of Sydney academic Dr Christopher Rudge flagged the mistakes publicly, prompting broader scrutiny. Media reporting subsequently verified fabricated or incorrect citations and a spurious legal quote, leading the department to request fixes and Deloitte to update the document.

Deloitte acknowledged that parts of the report have been created with a generative AI tool chain using Azure OpenAI GPT‑4o, licensed by and hosted within the department’s Azure environment.

In its updated version, the firm has stated the AI use has not affected the report’s core findings, and the department has said its recommendations have remained unchanged.

Refund and transparency steps

The firm has confirmed it has resolved the matter with the client and has agreed to repay the final instalment of the contract.

The government has said it will publish the contract details after the refund has been processed. Deloitte Australia, led by CEO Adam Powick, maintained confidence in the report’s substantive conclusions despite the corrections.