Consultants Forced to Pay Money Back After Getting Caught Using AI for Expensive “Report”

Major consulting firm Deloitte was forced to repay $291,000 to the Australian government after using AI that generated fake citations and nonexistent references in an official welfare system review report. The report contained multiple AI "hallucinations" including made-up sources that don't exist. When confronted, Deloitte attempted to cover up the mistakes by replacing single fake references with multiple new ones, suggesting their claims weren't based on real evidence. The scandal has prompted lawmakers to demand stricter oversight of consulting firms and question whether governments should verify that human experts, not AI tools, are doing the expensive work taxpayers fund.