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. [...] Now the new version 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."
Curated from theregister.com →
Australia's Department of Employment and Workplace Relations paid Deloitte around 440,000 Australian dollars to review the Targeted Compliance Framework, the automated system that penalises welfare recipients. The report was published in August 2025. A University of Sydney academic, Chris Rudge, then found citations to papers that do not exist, including several attributed to a real law professor, and a fabricated quotation from a Federal Court judgment in the robodebt case. Deloitte issued a corrected version stripping more than a dozen references, added a disclosure of the AI toolchain that had not been in the original, and refunded the final instalment, about 97,000 Australian dollars. The department says the findings and recommendations are unchanged.
