Social workers are so ill-trained at dealing with routine cases in court - even though this is a core statutory role for them - that they have been relying on lawyers as a "safety net".
This has forced Oranga Tamariki to do a u-turn on cutting so many lawyers under the government's drive to slash public spending.
Oranga Tamariki said it only learned about the over-reliance on lawyers from internal feedback about its job cuts over the past few weeks.
"As an organisation we have created a dependency on solicitors as a safety net where they are involved in routine matters, because we have underinvested in training in the statutory social worker function (such as understanding, interpreting, and applying the law, and preparing for court)," chief executive Chappie Te Kani said.
"There is a lack of confidence in court, and in some cases genuine fear and concern from withdrawing the safety net at the scale proposed, without having first lifted the capability of social workers and their supervisors."
The cuts were finalised last week, with 419 jobs going.
However, Te Kani said there were fewer lawyers among them than planned, in order to plug the gaps.
Oranga Tamariki would begin a review to clarify whose job was whose and to improve the training of social workers, he said.
"The shift in ways of working in line with my expectations will take more time to implement as a result."
Te Kani first admitted to the problem at a Budget scrutiny select committee two Wednesdays ago, but did not go into detail.
He told MPs that lawyers had "usurped the role of social workers in some cases", but he could not get rid of them for fear it would "put at risk the delivery of those services" to children.
The MPs did not ask many questions about that.
Court work is a fundamental role for social workers, who are agents of the court in what is often a fraught environment for whānau. There are often very high stakes involved in such cases, such as losing custody of their children to the state.
Among other tasks, social workers are meant to verify if the evidence they gather meets legal tests and thresholds.
Reviews of Oranga Tamariki over the years have said that because the agency is the only one that undertakes statutory social work, new hires often will have no or limited experience of the legislation or their statutory role.
Once on the job, they often fail to get up to speed sufficiently due to problems with induction and professional supervision, the reviews have said.
According to someone familiar with the situation: "This meant there was a murky overlap where [social workers] were doing their best but making a statutory mess, and lawyers were doing their best but making a social work mess."
Chief Children's Commissioner Dr Claire Achmad told RNZ that many independent reports had shown the need for better support.
She was keen to find out how Oranga Tamariki would address the issue.
"In the broader context of change at the ministry, including signalled job cuts and potential reductions to community-led services for children, I'll be seeking assurance from Oranga Tamariki that this work is underway."
Te Kani declined to be interviewed, and Minister for Children Karen Chhour did not respond to questions from RNZ on Thursday.