Western Australia seeks repayment from Deloitte over flawed AI-assisted university report

Western Australia is seeking expedited repayment from Deloitte for a $166,000 university-merger study containing AI-hallucinated references and cost totals that do not add up. The government says the errors leave the report’s modelling and findings intact, setting up a dispute over whether correcting the document is enough to restore confidence in its conclusions.

The Department of Energy and Economic Diversification has written to Deloitte to speed up repayment, a government spokesperson told Guardian Australia. The state commissioned the study to examine possible mergers involving the University of Western Australia, Curtin University and Murdoch University. The request does not confirm that Deloitte has repaid the money.

Two totals, hundreds of millions apart

Deloitte examined three merger options, each with low-, mid- and high-cost scenarios, and set out its calculations in an appendix. Two examples identified by the Guardian show discrepancies running in opposite directions: one understates the sum of the listed costs by $260 million; another overstates it by $311 million.

Stephen Bartos, a University of Canberra professor and public-sector governance expert, said the errors discredited the report. He said the numbers matter to the decision: a government might reject a merger if its costs do not add up.

AI disclosure did not settle the questions

The cost discrepancies follow revelations earlier in October that the same study contained AI-hallucinated references. Deloitte disclosed using generative AI to help collate research, synthesize information and proofread the document. It had previously described the errors as “minor,” according to the Guardian.

Other problems in the document

• A World Health Organization reference carried a ChatGPT metadata tag in its URL, the Guardian found, indicating that the link came directly from the chatbot.
• The study repeatedly called Curtin the Curtin University of Technology, a name the institution stopped using in 2010. The name change was reflected in state legislation in 2017.

Christian Downie, a professor at the Australian National University’s school of regulation and global governance, said the broad AI disclosure was insufficient. He called for more detail about which parts of report writing used AI, particularly data collection where the data itself is in question.

A correction or a fresh start?

The government says Deloitte will review and reissue the report. A spokesperson said officials were “extremely disappointed” to discover errors at this stage, but had been advised that the modelling and findings were unaffected. The spokesperson said the university reform business case would examine all available data alongside new information.

Bartos proposed a more extensive remedy: a new report, or at least a ground-up manual reworking without AI. His position challenges the idea that fixing individual mistakes will be sufficient. WA tertiary education minister Tony Buti initially called the errors “typos,” then said a day later that he was angry and disappointed with Deloitte.

Downie also urged governments to review consulting contracts as AI use grows, with suitable incentives and penalties for outsourced work. Deloitte did not respond to the Guardian’s questions. Buti has made the merger decision conditional on whether the business case stacks up. That leaves the study’s repair tied to a major public decision, not just proofreading.