Deloitte to partially reimburse Australia for report containing apparent AI-generated errors

MELBOURNE, Australia — MELBOURNE, Australia (AP) — Deloitte Australia will partially refund the 440,000 Australian dollars ($290,000) paid by the Australian government for a report that was littered with apparent AI-generated errors, including a fabricated quote from a federal court judgment and references to nonexistent academic research articles.

The financial services company’s report to the Department of Employment and Workplace Relations was initially published on the department’s website in July. A revised version was released on Friday after Chris Rudge, a health and wellbeing law researcher at the University of Sydney, said he alerted the media that the report was “full of fabricated references”.

Deloitte reviewed the 237-page report and “confirmed that certain footnotes and references were incorrect,” the ministry said in a statement Tuesday.

“Deloitte had agreed to reimburse the last payment provided for in its contract,” the ministry said. The amount will be made public after the reimbursement has been made.

Asked to comment on the report’s inaccuracies, Deloitte told The Associated Press in a statement that “the issue was resolved directly with the client.”

Deloitte did not respond when asked if the errors were generated by AI.

The tendency of generative AI systems to fabricate information is known as hallucination.

The report examines departmental IT systems’ use of automated sanctions in Australia’s welfare system. The ministry said the “substance” of the report had been maintained and no changes had been made to its recommendations.

The revised version included a disclosure that a generative AI language system, Azure OpenAI, was used in writing the report.

Quotes attributed to a Federal Court judge have been removed, as have references to non-existent reports attributed to experts in law and software engineering.

Rudge said he found as many as 20 errors in the first version of the report.

The first error that jumped out at him was wrongly saying that Lisa Burton Crawford, a professor of public and constitutional law at the University of Sydney, had written a non-existent book whose title suggested it was outside her area of ​​expertise.

“I immediately knew it was either an AI hallucination or the world’s best kept secret, because I had never heard of this book and it seemed absurd,” Rudge said.

The work of his academic colleagues was used as “a token of legitimacy,” cited by the report’s authors but not read, Rudge said, adding that he considered misquoting a judge to be a more serious error in a report that was in fact an audit of the department’s legal compliance.

“They totally misquoted a court case and then made up a quote from a judge and I thought, wait: this is actually a bit bigger than the academics’ ego. This is misrepresenting the law to the Australian government in a report that they’re relying on. So I thought it was important to defend diligence,” Rudge said.

Senator Barbara Pocock, the Australian Greens party’s public sector spokesperson, said Deloitte would have to repay the full AU$440,000 ($290,000).

Deloitte “misused AI in a very inappropriate way: it misquoted a judge, used references that are non-existent,” Pocock told Australian Broadcasting Corp. “I mean, the kind of thing a freshman in college would have big problems with.”