The Western Australian government has said it is “extremely disappointed” and is seeking an “expedited” cost recovery from Deloitte after errors were discovered in a report about a potential university merger, including AI-hallucinated references and hundreds of millions of dollars in cost discrepancies. The government paid Deloitte $166,000 for a feasibility study on merging the University of Western Australia, Curtin University and Murdoch University. Deloitte considered three merger options between the three universities, with “low”, “mid” and “high” cost scenarios, and broke down the calculations of those costs in the report’s appendix.
Under the “high” cost scenario of a merger between Curtin and UWA, the report calculates the “total costs to day 1” as $514m, and “post day 1” over five years at $145m. The total cost of those two payments is $659m but the report wrote $399m – a $260m discrepancy. Prof Stephen Bartos, an expert in public sector governance at the University of Canberra, said the errors discredited the report.
That total would be $512m but the report calculates the two numbers to $823m – a $311m discrepancy. Deloitte is already under pressure after it was revealed in the media this month that the same report contained hallucinated AI references, leading the state opposition to label it “AI slop”. The consultancy firm admits in its report it used generative AI to “support the collation of research, synthesis of information and editorial proofing” and had earlier dismissed the errors as “minor”.
A spokesperson for the WA government told Guardian Australia that the Department of Energy and Economic Diversification had written to Deloitte to expedite the cost recovery process for the report. Guardian Australia has found that one of the references to a World Health Organization report has a ChatGPT metadata tag on the URL, indicating that the link was directly sourced from the chatbot. In the report, Curtin University is referred to repeatedly as the Curtin University of Technology – a name the institution has not used since 2010, and that was changed under an act of state parliament in 2017.
Bartos said the numbers diverging so significantly was cause for concern. Prof Christian Downie, from the Australian National University’s school of regulation and global governance, who has previously examined submissions to government that contained AI hallucinations, said human errors happened and mistakes in reports could be expected and, although Deloitte outlined broadly its use of AI in the report, there was a lack of transparency. He said broadly as AI use increases, governments need to reassess their contracts with consultancy firms.
The WA government has that argued the merger is a “once-in-a-generation” opportunity. Buti told the ABC on Tuesday: “I want to commit to it if the business case stacks up, and then it’s a government decision.” It was not supported by Murdoch University, whose vice-chancellor, Prof Andrew Deeks, criticised the report and penned an op-ed on the university’s website arguing that “all that a university merger will do for WA is cost a lot of time, money and energy, while reducing choices for students and alienating alumni”.
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