Western Australia Wants Its Money Back After an AI-Assisted Study Went Wrong

Western Australia is asking Deloitte for its money back after a university merger study the firm produced turned out to contain errors linked to the use of generative AI. The study, which cost A$166,000, examined a proposed merger involving the University of Western Australia, Curtin University and Murdoch University. According to reports, the problems ranged from references that did not exist to cost figures in an appendix that did not add up.

The case has drawn attention well beyond Perth. It raises a practical question for every organisation that now uses AI tools at work: who checks the output before it is handed to a client, a minister or the public? In this case, the answer appears to have been nobody, at least not carefully enough, and the state government now wants repayment.

What the study was supposed to do

The study was a cost benefit analysis of a possible merger of three Western Australian universities. Work of this kind is meant to give decision makers a clear, evidence based picture: what a merger might cost, what it might save, and what risks would come with it. The numbers matter because they shape funding choices and public debate, and the references matter because they show where the evidence came from.

Deloitte disclosed that generative AI had assisted with parts of the work, including gathering research, summarising material and proofreading. That disclosure is now central to the story. Using AI tools to help draft or summarise is common in professional work, but the tools can produce confident sounding text that is wrong, including citations to papers or reports that were never written. When that material reaches a client without a full human check, the error can travel a long way before anyone notices.

How the errors came to light

According to reports, questions about nonexistent references in the study first surfaced in October, beginning with a post on Reddit. Times Higher Education reported that sequence of events, and the story was then picked up by Guardian Australia. Deloitte initially described the mistakes as minor, according to that reporting, and the Western Australian government instructed the firm to produce a corrected version.

Guardian Australia then identified further problems. It reported arithmetic errors in an appendix to the study. Two costs associated with a merger between Curtin University and the University of Western Australia added up to A$659 million, the reporting said, while the study itself listed the figure as A$399 million. That gap changes how a reader understands the cost of the proposal.

A government spokesperson told Guardian Australia that officials had written to Deloitte seeking faster repayment and expressed disappointment. The spokesperson also said officials had been assured the mistakes did not affect the modelling or the conclusions of the study, and that Deloitte would issue corrections. The firm did not answer questions put to it by Guardian Australia in that reporting.

Why a refund is being sought

Governments pay for professional advice because they expect it to be reliable. A study that contains invented references and wrong arithmetic fails that basic test, even if the overall conclusions are later said to stand. The refund request is therefore about more than A$166,000. It is about whether the work was fit for the purpose it was bought for, and whether the checks that should surround AI assisted work were in place.

The episode also follows a separate case from 2025. In that earlier instance, Deloitte agreed to return part of the payment for an A$440,000 Australian federal government report that contained AI generated errors. That history makes the Western Australian case harder to present as a one off slip. It suggests a pattern that clients, regulators and the firm itself will now have to address, rather than a single document that can simply be corrected and forgotten.

For other organisations, the lesson is less about one firm and more about process. AI tools can speed up research and drafting, but they do not remove the need for a human to verify every citation, recheck every number and read the final document as if it were going to be published under their own name. A tool that helps write a report is not the same as a source, and a summary produced by software is not evidence until a person has checked it against the original material.

What happens next

The immediate next step, according to reports, is the corrected version of the study that Deloitte is expected to issue. That document will face close scrutiny, and any further errors would deepen the damage.

The broader question is what changes inside firms that sell AI assisted work. Clients may start asking, in writing, how AI was used in a report, what was checked by a person, and who signed off on the numbers. Procurement teams may ask for those answers before a contract is signed, rather than after a flawed report becomes public. It would simply treat AI output as a draft that needs checking, not as a finished product.

Western Australia has not, in the reporting so far, claimed that the merger idea itself is dead, or that the corrected study will change the case for or against it. The dispute is narrower than that, and that is what makes it useful. It is a dispute about quality control, accountability and trust in work produced with AI help. Those are questions every workplace using these tools will have to answer, and this case gives them a clear example of what happens when the answers arrive too late.

Frequently Asked Questions

What did the Western Australia study get wrong?

According to reports, the study contained references that did not exist and arithmetic errors in an appendix. Guardian Australia reported that two costs linked to a Curtin University and University of Western Australia merger added up to A$659 million, while the study listed A$399 million.

Did Deloitte use AI to produce the study?

Deloitte disclosed that generative AI assisted with research gathering, summarising material and proofreading, according to reports. The reporting does not claim that AI wrote the whole study on its own.

Why is Western Australia seeking a refund?

Officials have written to Deloitte seeking repayment and expressed disappointment, according to Guardian Australia. The government has also been assured the mistakes did not affect the modelling or conclusions, and Deloitte is expected to issue corrections.