Child, Youth and Family says it needs to improve its assessment of its caregivers, and support for them, after figures showed 37 children and young people were abused while under state care last year.
The Ministry of Social Development's annual report says the children were placed with approved caregivers.
Chief social worker for Child, Youth and Family Paul Nixon says the abuse was nearly all physical, with caregivers not coping with the children and over-chastising them.
Mr Nixon says children need to feel safe in care.
"It's very sad that a small number of children who come to a place where they should be safe and should be with trusted adults are abused.
"It's around physical assaults and there's a real need to improve our support and our assessment of these care givers to make sure that we keep children safe."
The ministry is putting in place its Children's Action Plan, which includes vetting caregivers and imposing Child Abuse Prevention Orders on people at risk of harming children.
Figures from the ministry's report also showed nearly 21,800 cases of substantiated abuse in the year to June.
That's a rise of more than 200 cases from the year before.
More than half involved emotional abuse, a quarter were cases of neglect and the rest were instances of physical or sexual abuse.
However, the total number of notifications of potential child abuse or neglect, including referrals from the police, was down by 3% overall, to 148,000.
National child abuse prevention network Jigsaw's chairperson Tim Metcalfe says the fall in notifications is minimal.
"I don't see the drop as significant, and I see the actual volume of reports and concerns as telling me that as a nation we've got a hugely serious issue on our hands that needs huge attention across the board," says Mr Metcalfe.