‘Extremely disappointed’: WA government seeks reimbursement from Deloitte over flawed university report

The Western Australian government has expressed its “extremely disappointment” 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. “In my view, they’re so extensive that you probably need a new report, or at the very least someone to go through that material from the ground up and rework it manually without the use of AI,” he said. “Any errors in a report like this, especially on something controversial like a university merger, discredits the report, and Deloitte shouldn’t have had these errors.”

Under a “low” cost merger scenario between Curtin, UWA and Murdoch, the total costs to day one are $396m and total post day one over five years are $116m. 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. “We are extremely disappointed these errors are being found now,” the spokesperson said. “We are advised they do not affect the modelling in the report or its findings, but any errors will be corrected as part of a review by Deloitte which will re-issue the report. All available data, along with new information, will be interrogated by the university reform business case.”