Incident: References cited that nobody had read

Module 9 · Incident file · About 30 minutes

What happened

In December 2024 Australia's Department of Employment and Workplace Relations (DEWR) signed a contract, valued at about A$440,000, with Deloitte Australia for an independent assurance review (CFO Dive, Alexei Alexis, 21 October 2025). The 237-page report reviewed the department's IT systems' use of automated penalties in the welfare system, and was published on the department's website in July 2025 (Associated Press, Rod McGuirk, 7 October 2025).

Chris Rudge, a Sydney University researcher of health and welfare law, told the media the report was "full of fabricated references". He found up to 20 errors. The first that caught his eye said that Lisa Burton Crawford, a Sydney University law professor, had written a book that does not exist. The report also included "a fabricated quote from a federal court judgment and references to nonexistent academic research papers" (AP).

A revised version was published on the Friday before 7 October. It removed the quotes attributed to a federal court judge and the references to nonexistent reports, and disclosed that "a generative AI language system, Azure OpenAI, was used in writing the report" (AP's words). The department said Deloitte had "confirmed some footnotes and references were incorrect" and would repay the final instalment of its contract; it said the report's substance and recommendations had not changed. On 21 October a department spokesperson said Deloitte had refunded over A$97,000 (CFO Dive). Deloitte told AP the "matter has been resolved directly with the client" and did not say whether AI caused the errors.