A manager at the Hauraki Maori Trust Board believes bureaucracy is preventing it from looking after more of the tribe's children or young people in state care.
More than half the 4000 tamariki and rangatahi in state care are Maori.
The Hauraki Trust Board is one of five iwi service providers which takes care of children or young people, with a priority on its own descendants.
Head of whanau development Christina Wi-Nera says the trust used to have 30 children in care, now it has custody of only two.
She says it misses out on caring for its own because it can only be funded for children by its local Child, Youth and Family branch in Paeroa.
Ms Wi-Nera says if an Auckland or Hamilton branch has a Hauraki child who needs care, it will have to pay the trust board to take on that child.
Child, Youth and Family has established 'whakapapa researchers' to find relatives who can look after the child.
It refers to these as whanau placements, although while from the same iwi, they are not necessarily part of the child's extended family.
Principal Maori advisor to CYF, Moana Eruera, says half the mokopuna in its custody are in whanau placement, which is a good statistic, but could improve.
She says while the department encourages iwi care for approved providers, many are more interested in being involved in preventing children from being in and out of home placements altogether.
Ms Eruera says the department is working with six iwi that have the most children in state care, to improve its systems with Maori.
One example is moving towards iwi co-facilitating Family Group Conferences.
Social Development Minister Paula Bennett says she encourages iwi services to provide care for children in state custody, but it is not vital.
Mrs Bennett says it is better for Maori children to be placed with whanau or have a link to their tribe, but iwi services providing care is not the vital link to those children's future success.