Deloitte to Repay Final Instalment Over AI Errors

A Deloitte Australia assurance review of the Department of Employment and Workplace Relations' Targeted Compliance Framework contained fabricated academic citations, phantom footnotes and a made-up Federal Court quote, prompting University of Sydney academic Dr Christopher Rudge to flag more than a dozen nonexistent references. The 273‑page review was commissioned in December 2024, published in July and has been reuploaded in corrected form after bogus references were removed, the reference list rewritten and typographical errors fixed. The revised report discloses that a generative AI large language model (Azure OpenAI GPT‑4o) based tool chain—licensed by DEWR and hosted on DEWR's Azure tenancy—was used in the methodology. Deloitte has acknowledged incorrect footnotes and references and has agreed to repay the final instalment of its AU$440,000 contract; DEWR and Deloitte say the corrections do not change the review’s substantive findings or recommendations. Critics, including Rudge and a Labor senator, say the undisclosed AI use and resulting "hallucinations" undermine confidence in analysis that underpins automated welfare penalties.