Deloitte will refund Australian government for AI hallucination-filled report

The Australian Financial Review reports that Deloitte Australia will offer the Australian government a partial refund for a report that was littered with AI-hallucinated quotes and references to nonexistent research.

Deloitte's "Targeted Compliance Framework Assurance Review" was finalized in July and published by Australia's Department of Employment and Workplace Relations (DEWR) in August (Internet Archive version of the original). The report, which cost Australian taxpayers nearly $440,000 AUD (about $290,000 USD), focuses on the technical framework the government uses to automate penalties under the country's welfare system.

Shortly after the report was published, though, Sydney University Deputy Director of Health Law Chris Rudge noticed citations to multiple papers and publications that did not exist. That included multiple references to nonexistent reports by Lisa Burton Crawford, a real professor at the University of Sydney law school.

"It is concerning to see research attributed to me in this way," Crawford told the AFR in August. "I would like to see an explanation from Deloitte as to how the citations were generated."

“A small number of corrections”

Deloitte and the DEWR buried that explanation in an updated version of the original report published Friday "to address a small number of corrections to references and footnotes," according to the DEWR website. On page 58 of that 273-page updated report, Deloitte added a reference to "a generative AI large language model (Azure OpenAI GPT-4o) based tool chain" that was used as part of the technical workstream to help "[assess] whether system code state can be mapped to business requirements and compliance needs."