Seventeen percent of early childhood services are failing to meet regulations that ensure children's safety and well-being, says the Education Review Office.
It says in some services the owners have not been vetted by the police, and nobody is keeping track of teachers' registration.
The review office says 43 percent of the 200 early childhood services it visited in the first term last year were fully compliant with all requirements and a further 40 percent had only minor areas of non-compliance.
It says 17 percent were not up-to-date with their responsibilities or were not managing them well.
The review office says they had minimal or insufficient policies regarding safety and well-being, and their managers did not know enough about the regulations.