Oranga Tamariki says more frontline workers and better training programmes for caregivers are among the list of improvements it plans to make.
The details are outlined in a report by the department's Safety of Children in Care Unit, released today.
Oranga Tamariki is responsible for the well-being of at-risk children, and has recently been under fire for some of its practices, especially around the removal of children from whānau into care.
The report shows that in the year to June, 464 children had 707 incidents of harm recorded, including neglect, emotional, physical and sexual harm.
This represents 5.65 percent of all children in care in that time, and looks at all types and levels of harm in all settings, ranging from minor to serious.
A children's advocate said the report showed most children remained safe, but for too many there was a continuing risk.
Deputy chief executive of Voices of Children at the Ministry for Children, Hoani Lambert, said a large proportion of harm, particularly emotional harm and neglect, occurred when children returned home and were back in the care of whānau.
Oranga Tamariki chief executive Grainne Moss said the report highlighted the complex challenge caregivers, particularly family caregivers, faced in caring for tamariki who had been impacted by trauma.
"As an organisation, we are making improvements in how we support children in care, their whānau and caregivers.
"This includes more frontline workers with a focus on children and young people in care, and ensuring tamariki Māori are connected to their whakapapa, and nurtured by whānau, hapū and iwi.
"We are also working with communities to develop a more systematic approach to early intervention, to ensure more effective and better targeting of services to meet the needs of children and their whānau early on," Ms Moss said in the report.
She said it identified opportunities to strengthen whānau recruitment, training and support so those caregivers had a better understanding of the needs of tamariki and the necessary skills to respond to those needs.
Mr Lambert said this first annual report provided a baseline for measuring the safety of children and young people in care, and clarified the nature of the harm and the work needed to reduce it.
"Children enter the care of Oranga Tamariki because they have been harmed, and research tells us that makes them more vulnerable to further harm. They also often have complex needs and responding to these needs safely is difficult.
"What the data shows us is that when we remove children from those harmful situations the vast majority are kept safe. It also shows that for some children there is a continuing risk of harm," Mr Lambert said.
He said it was an area of particular focus, and why they would be investing heavily in new services, such as intensive intervention to put the support around these families.
"This annual report reminds us that we still have work to do.
"We know that one of the best ways to better support families is to start working with them as early as possible and this year's Budget investment into early and intensive intervention will enable us to do that in partnership with iwi and Māori organisations," Mr Lambert said.