WA Government Requests Reimbursement from Deloitte Over Defective University Report

The government of Western Australia has expressed severe disapproval following the discovery of significant errors in a feasibility report regarding a possible merger of three major universities: the University of Western Australia, Curtin University, and Murdoch University. Among the issues identified were inaccuracies attributed to AI-generated references and discrepancies amounting to hundreds of millions of dollars.

This report, for which the government paid Deloitte $166,000, originally assessed three potential merger scenarios—low, mid, and high cost—for the involved universities. In the “high” cost scenario for merging Curtin and UWA, the report estimated total initial costs at $514 million and additional post-merger costs over five years at $145 million. However, the reported total of $399 million presented a staggering $260 million discrepancy.

According to Prof Stephen Bartos, an authority in public sector governance at the University of Canberra, the pervasive nature of these errors could undermine the credibility of the entire report. “The discrepancies are so pronounced that a new assessment is warranted, or at the very least, a thorough manual review should be conducted,” he commented, stressing that mistakes in reports of such crucial significance completely discredit the findings.

In the “low” cost merger scenario, total costs to day one were estimated at $396 million with an additional $116 million post day one, leading to an expected total of $512 million. Yet, the report incorrectly presented these costs as totalling $823 million, resulting in a $311 million discrepancy.

Deloitte is under additional scrutiny due to reports of “hallucinated” AI references within the same report, prompting the opposition to denounce it as “AI slop.” The consultancy acknowledged that it employed generative AI for various tasks, including research compilation and editorial proofreading, and initially downplayed the errors as “minor.”

A spokesperson for the WA government indicated that the Department of Energy and Economic Diversification has formally requested Deloitte to expedite the process of recovering costs related to the report and expressed profound disappointment that these errors were found at this stage. They noted that Deloitte claims these mistakes do not impact the report’s modeling or findings, and measures will be taken to revise and correct the report.

The state’s Minister for Tertiary Education, Tony Buti, categorized the discrepancies as “typos” but later expressed frustration with Deloitte. In addition, investigations revealed that one reference within the report to a World Health Organization report contained metadata from ChatGPT, indicating that it was sourced from the AI chatbot directly.

One noteworthy mistake involved the frequent reference to Curtin University as the “Curtin University of Technology,” a title the institution abandoned in 2010 after changes were enacted by state parliament in 2017. Bartos raised concerns about the significant variations in reported numbers, asserting that such discrepancies might deter government approval for the merger.

Prof Christian Downie from the Australian National University also underscored the need for greater transparency regarding the use of AI in the report’s preparation. He emphasized the critical importance of detailing how AI contributes to the writing and data collection processes, asserting that this lack of visibility makes it challenging to trust the report’s outcomes.

Against the backdrop of this controversy, the WA government maintains that the proposed merger represents a rare opportunity for the state. Buti stated, “If the business case is compelling, I’m prepared to endorse it, and ultimately, it will be a government decision.” However, this notion has faced opposition from Murdoch University, whose Vice-Chancellor, Prof Andrew Deeks, publicly criticized the report. He argued that merging universities would result in more costs and reduced options for students while alienating alumni, stating, “It is extraordinary that the WA government continues to fall for this nonsense. Another fail for Deloitte.”

Deloitte has yet to respond to inquiries from Guardian Australia regarding this matter.