Deloitte to Refund Partial Payment for Flawed $440K Welfare Report

In October 2025, it was revealed that consulting firm Deloitte will provide a partial refund to the federal government over a $440,000 report that contained several errors. Deloitte had admitted to using generative artificial intelligence to help produce the report, which was commissioned by the Department of Employment and Workplace Relations (DEWR) to review the targeted compliance framework and its IT system.

The original report, published in July 2025, found widespread issues with the framework, including a lack of "traceability" between the rules and the underlying legislation, as well as "system defects". However, multiple errors were later discovered, including nonexistent references and citations.

University of Sydney academic Dr. Christopher Rudge, who first highlighted the errors, said the report contained "hallucinations" where the AI models may have filled in gaps or misinterpreted data. Deloitte did not initially state that AI was the reason behind the errors, but has since acknowledged its use in an updated version of the report.

The department has confirmed that Deloitte will repay the final instalment under its contract, which will be made public after the transaction is finalized. While the substance of the review's recommendations remains unchanged, Labor senator Deborah O'Neill criticized Deloitte for having a "human intelligence problem" and suggested that procurers may be better off using a ChatGPT subscription instead of a big consulting firm.