BET THE COMPANY · C1 · 50 min

The Report With Invented Sources

A big consultancy sold a government department a 237-page report. Then someone checked the footnotes.

All the cases

Today: you'll talk about a real case of AI going wrong in consulting, learn a four-step way of giving a client a straight account of a problem, and practise three client conversations out loud.
Before we start — talk these through:
  • How do you use AI in your own work at the moment? What has it made faster, and what do you still check yourself?
  • Has a client or colleague ever found a mistake in something you had sent? What did you say first?
  • Should a client be told when AI helped to write something they are paying for?

The vocabulary of this story

Ten items. Say your answer out loud before you reveal it.

A · What do they mean here? Work it out from the context

Read the sentence, guess the meaning of the word in bold, then reveal.

One of the quotes in the report had been fabricated. The judge never said those words.
fabricate — to invent something false, for example a quote, a figure or a source, and present it as true.
She checked the footnotes one by one and found papers that did not exist.
footnote — a note at the bottom of a page that tells you where a fact or quotation comes from.
The contract was paid in instalments, and the last one had not been paid yet.
instalment — one of several smaller payments that together make up the full price.
The new version includes a disclosure that an AI tool was used to help write it.
disclosure — a statement that gives information people might not otherwise know. The verb is disclose.

B · Which term means…?

Three terms: own up to · get ahead of · sign off on. Say the right one, then reveal.

Which term means to approve something officially, usually after you have checked it?
sign off on (phrasal verb) — a partner signs off on a report before it goes to the client. The person who signs off is the one the client will ask afterwards.
Which term means to admit openly that something was your fault?
own up to — He owned up to the mistake in the first sentence of the call. Also: own up on its own.
Which term means to deal with a problem before it grows or before other people raise it?
get ahead of — She phoned the client to get ahead of the story.

C · Which word completes all three phrases?

One missing word fits every phrase in the group. Say it, then reveal.

a reliable ___  ·  cite your ___  ·  the original ___
source — a person, document or place that information comes from.
accept ___  ·  take ___  ·  avoid ___
responsibility — being the person who has to answer for something, especially when it goes wrong.
lose your ___  ·  build ___  ·  damage your ___
credibility — the quality of being believed and trusted.

Now use them — out loud

Before we read:
  • When did you last sign off on something without reading all of it? What happened?
  • Which sources do you trust most in your work, and which do you always double-check?
  • What would make a client lose credibility in you, and what would rebuild it?

The story, in three parts

Read each part. After it, answer the quick check from memory, then discuss one question.

Part 1 — The footnote that did not exist

In July 2025 an Australian government department published a report that had cost it 440,000 Australian dollars. The department was the one that deals with employment and workplace relations. The report was 237 pages long and it looked at the IT system behind welfare penalties, the automatic fines and payment cuts people get when the system thinks they have broken a rule. The firm that wrote it was Deloitte, one of the largest consultancies in the world.

A few weeks later a researcher who works on welfare law started reading it. He stopped at a reference to a book by a professor he knew. He knew the professor, and he knew the professor had never written that book. He kept going and found more. By his count there were up to twenty errors, among them references to academic papers that nobody had written and a quotation from a federal court judgment that the judge had never said.

He told a journalist, and that was when it became a news story.

Quick check — from memory, then reveal:

1. Who wrote the report, and who paid for it?

2. What did the researcher notice first?

3. What kinds of errors did he find?

1. Deloitte wrote it. An Australian government department paid for it, about 440,000 Australian dollars.

2. A reference to a book that the professor named in it had never written.

3. References to papers that did not exist, and a quote from a court judgment that the judge never gave. He counted up to twenty errors.

Discuss:
  • The researcher found the problem because he happened to know the professor. What does that tell you about how errors like this are usually caught?

Part 2 — The second version

The department asked Deloitte to look at the report again. Deloitte confirmed that some footnotes and references were wrong. A corrected version appeared in October. The fake quote was gone, the missing papers were gone, and a new line near the front said that part of the work had been done with a generative AI tool, Azure OpenAI. The first version had said nothing about that.

The department said the substance of the report stood and the recommendations were the same. Deloitte said it had settled the matter directly with its client, and it agreed to repay the final instalment of the contract. Asked whether AI had caused the errors, the firm did not answer at the time.

A senator said that this was not enough. She thought the whole fee should come back.

Quick check — from memory, then reveal:

1. What changed in the corrected version?

2. What did the department say about the report's recommendations?

3. What did Deloitte agree to do about the money?

1. The fake quote and the non-existent papers were removed, and a note was added saying a generative AI tool had been used.

2. That the substance was kept and the recommendations did not change.

3. To repay the final instalment of the contract, so a part of the fee, not all of it.

Discuss:
  • The first version said nothing about AI and the second version did. Do you think that note should have been in the first one? Why, or why not?

Part 3 — What a small firm can take from it

It is easy to say that a big firm should have known better, and perhaps it should. But nobody here seems to have used AI in a strange way. People use it to draft, to summarise and to tidy up references. The tool writes a footnote that looks right, with an author, a year and a journal, and the person reading at six in the evening has no reason to doubt it.

What the case shows is who carries the problem afterwards. The client did not hire a language model. It hired a firm, and the firm's name was on the cover. When the errors came out, nobody asked what the software had done. They asked who had signed off.

For a small consultancy with one or two clients, that matters even more. A large firm can lose a fee and carry on. A small one has a handful of relationships, and each one is built on the client believing what you tell them.

Quick check — from memory, then reveal:

1. Why would a footnote written by AI be easy to miss?

2. Who did people ask about after the errors came out?

3. Why does the case matter more for a small firm?

1. It looks right: it has an author, a year and a journal, so a tired reader has no reason to doubt it.

2. Who had signed off on the report, not what the software had done.

3. A small firm has only a few relationships, and each depends on the client trusting what the firm says.

Discuss:
  • If you had to guess, at which moment in the writing of that report could someone have caught the problem most cheaply?

How the tool works

When something has gone wrong, most people either hide it for a day or bury it in explanation. The Straight Account is four short moves, said in this order. Together they take under a minute: say what happened, say what it touches, say what you are doing, say what will change. Then stop talking and let the client respond.

WhathappenedWhat ittouchesWhat youwill doWhatchanges

Using it, step by step

  1. What happened: one sentence, in the active voice, with no cushioning. We found invented references in the report we sent you on Tuesday. Not: It appears that some irregularities may have arisen.
  2. What it touches: be exact about the size. Four footnotes in section three. The findings do not depend on them, and I am checking the rest. If you do not know yet, say that too.
  3. What you are doing: name an action and a time. I am rechecking every source today and you will have a corrected version by noon tomorrow.
  4. What changes: one concrete change to how you work. From now on, any source an AI tool gives me gets opened and read before it goes in a document. Then stop. Let them speak.

Try it yourself

Each line could be said to a client after a mistake. Which move is it doing, or is it not doing any? Choose, then check.

1. The tool gave us bad data, so honestly it was out of our hands.
2. We put four invented references in the report. That was our error.
3. There may have been some inconsistencies in places.
4. You will have the corrected report by noon tomorrow.
5. These things happen with AI, everybody has this problem.
6. I should have opened every source before I sent it.
7. We are looking into it and will revert in due course.
8. Every source now gets opened and read by a person before it goes in a document.

1. Excuse — it moves the problem onto the software. The client hired you, not the tool.

2. Owns it — plain, specific and in the first person plural. No hedging.

3. Vague — it does not say what, where or how many, so the client has to imagine the worst.

4. Fixes it — an action with a deadline the client can hold you to.

5. Excuse — it may be true, but it is about everyone else, and the client wants to know about you.

6. Owns it — it names the exact thing that was skipped, which is more convincing than a general apology.

7. Vague — no action, no time. It sounds like a way of ending the call.

8. Fixes it — a real change in how you work, which is what the client is worried about.

Where the tool breaks

Do not over-apologise. One clear apology is enough. Three in a row makes the client look after you instead of the other way round.

Do not guess. If you do not yet know how far the problem goes, say so and give a time when you will: I don't know yet. I'll know by five and I'll call you then.

It works on a call and in writing. In an email the four moves become four short paragraphs. Keep them in the same order.

Talk it through:
  • Which move would you find hardest to say aloud: the first one or the last one?
  • Is there a case where it would be right not to tell a client about a small mistake?

Its cousins

Bet the Company: all the casesReal business decisions, told as stories, with a language tool in each. Open the lesson →
Begin With the EndThree C1 lessons on answering clearly, leaving a silence and holding your position. Open the lesson →
English at WorkSpeaking role plays for high-stakes moments at work. Open the lesson →
The OODA LoopA different loop, for deciding fast when the situation keeps changing. Open the lesson →

Language — Owning a mistake: tenses and ownership

When you report a problem, the tense tells the client how you see it. A few small choices separate a clear account from an evasive one.

Present perfect for what you have just found; past simple for what happened: We've found four invented references. They went into the report on Tuesday, when I sent the draft. The first is news, with a result that is still true now. The second is a finished event with a time.
Active, not passive, when the mistake is yours: We included the references without checking them. Not: The references were included. The passive hides who did it, and clients notice.
Should have + past participle for what you would do differently: I should have opened every source. We should have told you how we were using the tool. For a promise about the future, use from now on + present simple: From now on, a person reads every source.

1. Which tense?

Put the verb in brackets into the correct form: past simple or present perfect.

1. We (just / find) a mistake in the figures you received.

2. The mistake (happen) when we copied the table last Thursday.

3. I (check) every source this morning, and two of them do not exist.

4. We (not / tell) you that we used an AI tool for the first draft, and I am sorry.

1. have just found — news with a result that matters now

2. happened — finished event with a time (last Thursday)

3. have checked — this morning is still part of today, and the result matters now. (checked is also possible if the morning is over.)

4. did not tell — a finished moment in the past. (have not told is also possible if you are still thinking of the present situation.)

2. Say it straight

Rewrite each sentence so that the speaker owns it. Do not use the passive.

1. Some references were not checked.

2. Mistakes were made in the second section.

3. The client was not told about the tool.

4. An error has been found in the numbers.

1. We did not check some of the references.

2. We made mistakes in the second section.

3. We did not tell the client about the tool. (or: I did not tell you)

4. We have found an error in the numbers.

Now report a small mistake of your own, real or invented, using one present perfect, one past simple and one should have.

Speak

Three conversations a consultant could have this month. Read the situation, take a moment, and speak. Aim for about a minute each.

Useful language: “I want to be straight with you about something.” · “We found…” · “That affects… but not…” · “By noon tomorrow you will have…” · “From now on…” · “I should have…”
Time remaining: 4:00
Task 1 — A client asks about AI

A client you have worked with for six months says, in a friendly way, By the way, do you use AI for my project? You do. Tell them what you use it for, what you never leave to it, and how you check what it gives you. Do not apologise for using it, and do not oversell it.

Task 2 — The phone call

On Thursday afternoon you find that a market figure in a document you sent on Tuesday came from an AI tool, and you cannot find the source. It may be wrong. The client has already shown the document to their board. Phone them. Use the four moves: what happened, what it touches, what you are doing, what changes. The person you are speaking with plays the client, and may interrupt.

Task 3 — A client wants a shortcut

A client in a recruitment business wants to use AI to rank a thousand CVs and send you only the top twenty. They want your view by the end of the meeting. Give a recommendation, two conditions you would set, and one thing that worries you. Then stop and let them respond.

To finish — the harder questions

  1. Rowe's pause and the Straight Account both depend on saying less. Which do you find harder, saying less or saying it sooner?
  2. Should a firm tell clients every time AI helped with a document? Where would you draw the line?
  3. Deloitte's second version added a note about AI. If you were advising a firm, what would you want that note to say, in two sentences?
  4. From memory: tell the story of the report in five sentences, then give the four moves of the Straight Account, using sign off on, credibility and get ahead of.