"Deloitte has agreed to refund part of an Australian government contract after admitting it used generative AI to produce a report riddled with fake citations, phantom footnotes, and even a made-up quote from a Federal Court judgment. The consulting giant confirmed it would repay the final installment of its AU$440,000 ($291,245) agreement with Australia's Department of Employment and Workplace Relations (DEWR) after the department re-uploaded a corrected version of the report late last week - conveniently timed for the weekend. The updated version strips out more than a dozen bogus references and footnotes, rewrites text, and fixes assorted typos, although officials insist the "substance" of the report remains intact. The work, commissioned last December, involved the Targeted Compliance Framework - the government's IT-driven system for penalizing welfare recipients who miss obligations such as job search appointments."
"Now the new version [PDF] contains a disclosure in its methodology section: Deloitte used "a generative AI large language model (Azure OpenAI GPT-4o) based tool chain licensed by DEWR and hosted on DEWR's Azure tenancy" to fill "traceability and documentation gaps." In plain English, the bot helped with analysis and cross-referencing. Rudge called it a "confession," arguing the consultancy had admitted to using AI for "a core analytical task" but failed to disclose this up front."
"When the report was first published in July, University of Sydney academic Dr Christopher Rudge spotted multiple fabrications, prompting Deloitte to investigate. Rudge initially suggested the errors might be the handiwork of a chatbot prone to "hallucinations," a suspicion Deloitte declined to confirm at the time."
Deloitte admitted using a generative AI tool to produce a government report that contained fabricated citations, phantom footnotes, and a made-up Federal Court quote, and agreed to repay part of an AU$440,000 contract. The Department of Employment and Workplace Relations re-uploaded a corrected report that removed more than a dozen bogus references, rewrote text, and fixed typos while officials maintained the substance remained intact. The report evaluated the Targeted Compliance Framework for penalizing welfare recipients. A University of Sydney academic identified multiple fabrications, prompting investigation and a methodology disclosure that the consultancy used an Azure OpenAI GPT-4o tool chain to fill traceability and documentation gaps.
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