The State Government is chasing a refund from Deloitte after the consultancy's feasibility study into merging three of Perth's public universities turned out to contain references invented by AI and cost totals that are wrong by hundreds of millions of dollars.
The government paid Deloitte $166,000 for the study, which looked at merging the University of Western Australia, Curtin University and Murdoch University. A government spokesperson told Guardian Australia that the Department of Energy and Economic Diversification had written to the firm asking it to speed up the "cost recovery process".
"We are extremely disappointed these errors are being found now." — WA Government spokesperson, to Guardian Australia
What went wrong
The report set out three merger options, each costed under low, mid and high scenarios, and showed the workings in an appendix. Guardian Australia's analysis of those workings found that several totals do not match the figures that are supposed to add up to them.
In the high-cost scenario for merging Curtin and UWA, the report puts the costs up to "day 1" of the new institution at $514 million and the costs over the following five years at $145 million. Those two figures add up to $659 million, but the report gives the total as $399 million, a gap of $260 million.
The low-cost scenario for a three-way merger goes wrong in the other direction. Its two components, $396 million and $116 million, come to $512 million, but the report's total is $823 million, $311 million too high.
Those are new findings. The report was already under fire after The West Australian reported on 13 October that it contained references produced by generative AI that did not hold up. The Liberals called it "AI slop". Guardian Australia now reports that one link, to a World Health Organization document, still carries a ChatGPT tracking tag, which suggests it was copied straight from the chatbot. The report also repeatedly calls Curtin the "Curtin University of Technology", a name the university dropped in 2010.
Deloitte says in the report that it used generative AI to help collate research, synthesise information and proofread. The firm had earlier called the errors minor. It did not respond to Guardian Australia's questions.
What the government says
The government's line is that the mistakes do not change the report's modelling or its findings. It says Deloitte will review and reissue the report, and that the separate business case now under way will test all the data again.
Tertiary Education Minister Tony Buti first played the problems down as "typos", then a day later said he was angry and disappointed with the firm. He has said he wants to go ahead with the merger if the business case stacks up.
Governance experts are less relaxed. University of Canberra professor Stephen Bartos told the Guardian the errors were so extensive the state probably needed a new report, or for someone to rework the material by hand without AI.
"Unless the numbers add up, a government might not want to do it." — Professor Stephen Bartos, University of Canberra
Why it matters
The merger is one of the Cook Government's biggest and most contested policies. The government calls it a once-in-a-generation opportunity. Murdoch University does not support it, and its vice-chancellor, Professor Andrew Deeks, has publicly attacked the Deloitte report. The idea also has a hard road through Parliament: the Liberals have refused to back it, and Mr Buti has conceded it could fail in the upper house.
Last week the government's tertiary adviser, Barney Glover, said the business case for the merger would have to be "compelling". A feasibility study whose own totals do not add up gives the merger's opponents an easy target, and leaves the business case carrying more of the weight.
It is also the second time Deloitte has had to answer for AI errors in a government report. The firm agreed last year to refund part of a $440,000 report to the federal government after it was found to contain AI-generated errors.
The government has not said how much it expects to get back from Deloitte or when the corrected report will be published.
Sources: Guardian Australia, The West Australian, AFR, Business News. Lead via X.
Photo: Winthrop Hall, University of Western Australia. Calistemon via Wikimedia Commons (CC BY-SA 4.0). File photo.
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