Where tech companies often foot the bill for projects like this, MD Anderson paid the $62 million for the project itself, ducking around usual procedures in the process. Former genomic medicine chair (and wife of MD Anderson's president) Lynda Chin reportedly didn't get approval from the center's IT department, and ensured that payments to IBM were just low enough to not require board approval. To make matters worse, payments were made from donations that hadn't been received, and didn't hinge on meeting tangible goals.

The actual technology, which mines patient and research databases for recommended treatments, wasn't necessarily at fault. While the audit says Watson is "not ready" for full-fledged use, doctors also said they were impressed -- the main issue is one of constantly switching focuses and technology. The emphasis switched from leukemia to lung cancer, and a change in medical record software rendered Watson incompatible without an overhaul. Moreover, the info used to feed Watson is outdated.

This doesn't mean that the project is dead. Even though MD Anderson tells Forbes that it's soliciting competitive bids to "see where the industry has progressed," its audit stresses that this isn't an opinion on Watson's abilities. IBM tells us that it's "proud" of its work, pointing out the audit's finding that Watson managed 90 percent accuracy when supporting lung cancer treatment decisions (you can read the full statement below). However, it's clear that a lot of work is needed to make this system useful in the real world. And regardless of whether or not that happens, MD Anderson is learning an expensive lesson in using AI wisely.