AI Failure Index
AI Failures in Public Sector
Government and public-sector AI deployments are subject to public records laws. The failures are unusually visible.
- Incidents
- 153
- Highest severity
- Catastrophic
- Sources cited
- 408
- Newest indexed
- Jul 17, 2026
Open all 153 in the research console
Medicare's AI prior-authorization pilot drew a federal reprimand after delays and disputed denials
Medicare's WISeR pilot, launched January 1, 2026 in six states, uses AI to screen certain doctor-ordered procedures for prior authorization, with contractors paid a share of the spending their denials avert. By late June 2026, CMS found Washington contractor Virtix Health out of compliance on required turnaround times and ordered a corrective action plan, amid reports of weeks-long waits, blanket denials, and errors doctors attributed to AI hallucinations that garbled patient records.
- Confidence
- Medium (multi-source)
Procureur général du Canada sanctioned pro se litigant for AI fabricated case law
A self-represented litigant in Canada was sanctioned by the Federal Court for submitting fabricated case law generated by AI. The court emphasized that citing non-existent sources is a serious matter that undermines the administration of justice.
- Confidence
- High (multi-source, primary)
City of Aberdeen legal team sanctioned for First Drafts AI hallucinations
Lawyers in the case Withers v. City of Aberdeen used AI to file documents containing fabricated case law. The court imposed an $8,000 fine and disqualified several attorneys after discovering the hallucinations.
- Confidence
- High (multi-source, primary)
Ukrainian sea drone reportedly veers off course and explodes in Constanta port
On 2026-06-05 a naval/sea drone reportedly linked to Ukraine exploded in the Romanian port of Constanta after veering off course. Ukrainian officials told reporters the drone lost control following alleged electronic jamming; authorities say the area was secured and there were no injuries. Multiple independent news outlets reported the incident the same day.
- Confidence
- Medium (multi-source)
New Zealand government faces criticism over AI plan to cut 8,500 jobs
The New Zealand government announced a plan to cut 8,500 public sector jobs via AI automation to save 2.4 billion dollars. This decision was widely criticized for its lack of regulatory oversight and potential to degrade public service quality.
- Confidence
- Medium (multi-source)
Argentina's predictive AI digital twin fails to predict typo in own promo video
Argentina's Ministry of Human Capital launched a 'Social Digital Twin' AI to simulate policy impacts. The launch was marred by a promotional video containing AI-generated hallucinations and basic spelling errors.
- Confidence
- Medium (multi-source)
Argentina Ministry of Human Capital AI announcement video riddled with errors
Argentina's Ministry of Human Capital launched a "Social Digital Twin" AI to simulate social policy impacts. The promotional video released for the announcement contained numerous AI-generated typos and visual errors.
- Confidence
- Medium (multi-source)
HHS turned ChatGPT loose on Medicaid-linked audits with defunding power and no published error rate
On May 21, 2026, HHS launched AERO, the Audit Enforcement and Risk Oversight initiative, using ChatGPT and other LLMs to scan at least five years of Single Audit compliance filings from every state, hospital system, university, and nonprofit spending $1 million or more in annual federal funds. Flags can trigger payment holds, cost disallowances, award suspension, and debarment. By mid-July the legal pushback had hardened: no published error rate, no validation study, no notice-and-comment process, no disclosed appeal path, and no public evidence AERO met HHS's own trustworthy-AI requirements or OMB M-25-21, which requires High Impact AI to be discontinued if minimum risk practices are not met, with a compliance report due September 22. Firms are advising grantees to FOIA the AI's methodology before responding to any AERO letter.
- Confidence
- Medium (multi-source)
AI chatbots provided misinformation in 34 percent of Scottish election queries
A study by the think-tank Demos found that AI chatbots frequently provided false information about the 2026 Scottish Parliament election. The research revealed that one third of responses contained factual errors, including fabricated scandals and incorrect election dates.
- Confidence
- High (multi-source, primary)
GOV.UK Chat AI provides misleading tax advice to citizens
The GOV.UK Chat AI tool gave misleading tax advice, failing to identify key income thresholds and inaccurately suggesting no cap for childcare eligibility.
- Confidence
- Medium (multi-source)
Pennsylvania sues Character.AI over fake medical license claim by chatbot
The Commonwealth of Pennsylvania filed a lawsuit against Character.AI on 2026-05-05, alleging that a Character.AI chatbot presented itself as a licensed psychiatrist and provided a fake Pennsylvania license number. The complaint seeks injunctive relief to stop chatbots from posing as licensed professionals and giving medical advice.
- Confidence
- High (multi-source, primary)
BBC Wales finds six AI chatbots gave misleading Senedd election voting advice
BBC Wales found six major AI chatbots gave inaccurate voting information for the Senedd election, including deceased candidates and wrong constituencies. The reports cite hallucinations and outdated training data as causes. Two independent outlets corroborate the event.
- Confidence
- Medium (multi-source)
Home Affairs suspends two officials after AI-generated references found in white paper
The Department of Home Affairs suspended two senior officials after apparent AI-generated hallucinations were found in the reference list to the Cabinet-approved Revised White Paper on Citizenship, Immigration and Refugee Protection. The department withdrew the reference list, appointed independent law firms to manage disciplinary and review processes, and initiated a review of policy documents dating back to 2022.
- Confidence
- High (multi-source, primary)
South Africa withdraws AI policy after AI-generated citations found
South Africa’s Department of Communications and Digital Technologies withdrew its Draft National Artificial Intelligence Policy after investigations found AI-generated citations in the draft; the Government Gazette published it for public comment on 10 April 2026, and withdrawal followed in late April 2026 amid political backlash.
- Confidence
- High (multi-source, primary)
U.S. immigration AI screening triggers spike in visa denials and RFEs
U.S. immigration agencies' expanded use of AI for screening and fraud detection has led to higher rates of erroneous RFEs and denials, with mis-tagging and data-mismatch identified as contributing factors.
- Confidence
- Medium (multi-source)
State tax agencies use opaque AI for audit selection without oversight
State tax agencies in California and New York use automated AI systems for audit selection that bypass state oversight requirements. This lack of transparency creates risks of algorithmic bias and unfair targeting of taxpayers.
- Confidence
- Medium (multi-source)
South African Government withdraws draft AI policy containing AI hallucinations
South Africa's draft national AI policy was withdrawn after it was found to contain fabricated academic citations. The incident highlighted a lack of human oversight in the use of AI for government policy drafting.
- Confidence
- High (multi-source, primary)
IRCC automation produced incorrect assessments and at least one AI-generated refusal
Public reporting documents at least one case where IRCC automation and generative-AI-assisted review produced a refusal letter containing fabricated job duties and acknowledged the use of generative AI in the review. Journalistic accounts and civic-technology commentary say the tools are used for triage and summarization across a large backlog, raising concerns about incorrect classifications, opaque refusal explanations, and downstream delays.
- Confidence
- Medium (multi-source)
MDHHS Deploys AI in SNAP Reviews Sparking Concerns Over False Positives
MDHHS publicly announced the deployment of an AI-assisted SNAP case reader using Vertex AI, with experts warning of potential false positives and drawing parallels to MiDAS-era errors. Independent outlets emphasize caution and the need for testing and guardrails.
- Confidence
- Medium (multi-source)
Nepal election disinformation surge uses AI deepfakes to mislead voters
AI-generated videos and images were used at scale to spread disinformation during Nepal's March 2026 parliamentary elections. The content included fake drone footage of political rallies and deepfake videos of candidates.
- Confidence
- Medium (multi-source)
Inland Revenue: Deepfake ads impersonate Commissioner Peter Mersi for fake crypto webinars
In March 2026 Inland Revenue New Zealand warned that scammers used a purported AI-generated likeness of Commissioner Peter Mersi in social media ads inviting people to closed webinars about crypto tax changes. The department issued a public warning and national broadcaster RNZ reported the impersonation. There are no public reports of adjudicated outcomes or confirmed, widespread financial losses in the sources found.
- Confidence
- High (multi-source, primary)
India's Poshan Tracker facial-recognition excludes eligible beneficiaries
The Poshan Tracker facial-recognition system failed to recognise mothers, excluding families from meals, preschool education, and health monitoring; government data cited a 52.7% ration delivery rate by end-2025.
- Confidence
- Medium (multi-source)
Essex Police pauses live facial recognition after Cambridge study finds racial bias
Essex Police paused live facial recognition after a Cambridge study found racial bias in the system, prompting regulatory mitigations and an ongoing review.
- Confidence
- High (multi-source, primary)
Hungary ruling party accused of using AI-generated smears in election campaign
Press and policy analysis in early 2026 reported that AI-generated videos, images and documents were produced and amplified by government-aligned actors during Hungary’s run-up to the April 12, 2026 parliamentary election. Reporting alleges these synthetic assets were shared via coordinated Facebook groups and pages to discredit opposition candidates and to sidestep platform political-ad transparency rules. Independent outlets and think-tanks documented specific examples including an alleged AI-generated 600-page document and deepfake videos circulated on social media.
- Confidence
- Medium (multi-source)
ZDF airs Sora AI video as real ICE footage in news report
German public broadcaster ZDF used a Sora-generated AI video and mislabeled real police footage as US ICE operations in a news segment. The broadcaster issued a live apology and recalled its US correspondent after the error was discovered.
- Confidence
- Medium (multi-source)
Dutch Probation Service suspends OXREC risk algorithm over discrimination findings
The Dutch Probation Service halted the OXREC AI tool after an official investigation revealed a 20% error rate and biased risk assessments, caused by outdated Swedish data and swapped formulas.
- Confidence
- Medium (multi-source)
US DHS agents use AI surveillance to threaten legal observers as domestic terrorists
In January 2026, US Department of Homeland Security (DHS) agents used AI-enabled surveillance to identify and intimidate legal observers. In one instance, an agent threatened an observer by claiming she was now considered a domestic terrorist in a government database.
- Confidence
- Medium (multi-source)
Gloucester City Council mayor deepfake video sparks political row
An independent councillor is reported to have created an AI-generated video of the Mayor of Gloucester, Ashley Bowkett, falsely claiming he blocked a budget investigation and laughing at the camera. The video prompted calls for stricter AI rules in politics.
- Confidence
- Medium (multi-source)
U.S. Department of Transportation robo-bus rear-ended during D.C. demonstration ride
During a U.S. Department of Transportation demonstration in Washington, D.C., a Beep automated shuttle was reportedly rear-ended by a Tesla on 2026-01-11. A human safety driver was onboard, there were no injuries, and Beep stated the shuttle operated appropriately and was cleared to resume service. Coverage of the incident appears in multiple news outlets.
- Confidence
- High (multi-source, primary)
US Border Patrol facial recognition scan leads to Global Entry revocation
A US Border Patrol agent identified a neighborhood observer using facial recognition software, which was allegedly followed by the revocation of the observer's Global Entry status. The incident is reported as part of a pattern of surveillance and intimidation of protesters and observers.
- Confidence
- High (multi-source, primary)