‘Ineffective’ NSW child protection system failing tens of thousands of children, auditor general finds

New South Wales is failing tens of thousands of vulnerable children due to an “ineffective” and “unsustainable” child protection system, a damning audit has found.

The state’s auditor general, Bola Oyetunji, released the scathing report on the child protection system on Thursday, finding that the Department of Communities and Justice (DCJ) was not meeting its legislative requirements to provide the care needed to protect children’s safety and welfare, nor providing the appropriate assistance for parents.

In 2022-23, the DCJ did not provide home-based safety assessments for 75% of the 112,592 children identified as being at “risk of significant harm”.

“Their cases were closed without any follow-up services from DCJ, and DCJ does not know the outcomes for these children,” the report said.

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Only 10,059 of those children identified to have been potentially at significant risk of harm received some form of family support service. The effectiveness of the service is unknown, however, because the DCJ was unable to provide a breakdown of what kind of support those children received due to “data quality issues”.

The audit also found the department had “failed in its duty of care” by not monitoring or assessing the mental health and wellbeing of children in out-of-home care, many of whom “experience trauma before, during and after being removed from their families of origin”.

In August last year, 30% of the 471 children in the state living in emergency care were placed in hotels, motels and serviced apartments at a cost of $829,000 a year per child on average.

Most of the care for the children in emergency placements was delivered by contracted shift workers who have no specific child protection qualifications and DCJ “lacks the systems” and reporting processes to understand the quality of this care, the report said.

Between 2018 and 2023 the number of children returned to their parents after being in out-of-home care declined by 27, the audit found.

The auditor general found in a separate audit handed down on Thursday that the DCJ had not effectively safeguarded the rights of Aboriginal children in the child protection system.

The audit found the DCJ had continued to use a tool that was found to create “caseworker bias” and had resulted in a “disproportionate number of Aboriginal children being unnecessarily taken into care”.

“It has not collected information about how many children have been impacted or taken steps to remediate where this may have occurred. The tools continue to be used, exposing DCJ to increased risk, including the possibility that it wrongly intervenes for Aboriginal families,” the report said.

Related: NSW taskforce aims to return Indigenous children to their families

About 7% of children in NSW are Aboriginal, but they make up 45% of the children in out-of-home care, the audit said.

In 1998, the NSW government passed legislation to establish principles to safeguard Aboriginal children in out-of-home care, but the audit found that, 26 years later, the DCJ was yet to put the principles into its policies or processes.

The DCJ said in a statement it would accept or accept in principle the recommendations of both audits, which would inform a review of the system already under way.

“The findings of both the NSW auditor general’s reports confirm everything we’ve been saying since we came into government – that the child protection system is in need of significant structural reform,” the families and communities minister, Kate Washington, said.

“We have begun the work to repair the system, but as laid out in these reports, there are significant issues in every direction, so it’s going to take time to deliver the outcomes children and young people deserve.”