Deloitte to Refund Part of $290,000 Fee Over Report Containing AI-Generated Errors

Deloitte Australia will partially refund the federal government after a report it produced was found to contain apparent AI-generated errors, including a fabricated judicial quote and citations to nonexistent academic papers.

The Department of Employment and Workplace Relations said Tuesday that Deloitte had agreed to repay the final instalment of its AU$440,000 ($290,000) contract after reviewing the 237-page report and confirming that «some footnotes and references were incorrect.» The refund amount will be disclosed once reimbursed.

Originally published in July, the report was revised and republished on Friday after Sydney University law researcher Chris Rudge alerted the media to what he described as «fabricated references.» The updated version now acknowledges the use of Microsoft’s Azure OpenAI language system in its preparation and removes false quotes and references.

Deloitte told the Associated Press that the «matter has been resolved directly with the client» but did not say whether the mistakes were generated by AI.

Rudge said he identified around 20 errors, including a made-up quote from a federal court judge and a fictitious book attributed to Sydney University professor Lisa Burton Crawford. He called the misquotation of a judge «a serious error» in a report meant to assess legal compliance.

Australian Greens Senator Barbara Pocock urged Deloitte to refund the entire contract amount, saying the firm had «misused AI and used it very inappropriately,» adding that the kinds of mistakes found «would get a first-year university student in deep trouble.»

The department said the report’s overall findings and recommendations remained unchanged.