Post by : Rameen Ariff

Global consulting firm Deloitte has agreed to refund part of its $440,000 payment from the Australian government after errors were found in a report on the “Future Made in Australia” initiative. The consultancy used generative AI tools in drafting the report, which was commissioned in 2024 to review the government’s compliance framework and IT system for job seeker obligations.

The initial July report contained multiple errors, including fictitious academic citations and a fabricated quote from a Federal Court judgment. Dr. Christopher Rudge, an Australian welfare academic, identified the AI “hallucinations”—instances where AI generates false or misleading information.

In response, the Department of Employment and Workplace Relations released an updated report with corrected references, removed fictitious citations, and added accurate sources. Deloitte confirmed that AI was only used in early drafting, with human experts reviewing the final report, and insisted that AI did not affect the “substantive content, findings, or recommendations.” The firm also disclosed that it used Azure OpenAI GPT-4 in the research process.

The incident has raised ethical concerns about AI use in high-value consultancy work. Deloitte has now resolved the matter with the government, and stricter AI guidelines may apply to future contracts. This case is one of the first major instances in Australia where undisclosed AI usage led to financial and reputational consequences for a private firm.

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