Oranga Tamariki is failing to tell most children about the outcome of any investigations into allegations of abuse or neglect.
Data provided by the Ministry for Children to the Independent Children's Monitor showed children were only told what happened in just over a quarter of cases.
The monitor's report for the year to June 2020 said it was important to tell tamariki what happened after they made a complaint, so they felt their concerns had been taken seriously.
"Closing the circle and reporting back to tamariki, rangatahi and their whānau is an important part of the allegation of abuse or neglect process," the report said.
"Regulation 69 requires that the tamariki and rangatahi at the centre of an allegation are informed of the outcome of the investigation."
The data also showed parents or guardians were informed about investigation outcomes in about a third of cases.
About 40 percent of investigations or assessments were completed on time.
In its response to the report, Oranga Tamariki acknowledged improvements needed to be made.
Children's Commissioner Andrew Becroft said the monitor's report painted a "horrifying picture of lapses and failures within Oranga Tamariki that are utterly unacceptable".
It was crucial children found out what happened if they had made a complaint, Becroft said.
"It is vital they have confidence and trust in the system, that their complaints are dealt with promptly and meaningfully and they know the result."
Becroft hoped improvements were being made.
"I would be deeply concerned if nothing had been done," he said.
Children's Minister Kelvin Davis said it was disappointing Oranga Tamariki was not telling most children about the outcome of any investigations into allegations of abuse or neglect.
Davis said the agency's performance was under scrutiny and he was adamant big changes were on the horizon.
Changes were needed "urgently", he said.
"There is a number of things that I'm not happy about in terms of Oranga Tamariki's actions. I think it's important that children and their whānau are informed of the outcomes of any investigations.
"I think that's just the right thing to do."
For now, he said the government was doing everything it could to make sure Oranga Tamariki would "live up to the promise in its name".
Independent Children's Monitor executive director Arran Jones said in a statement: "We will continue to monitor how the agencies handle allegations of abuse and neglect in care, and this will be included in our next report, due at the end of the year. This report will also cover all of the National Care Standards. It will be presented to the Minister of Children at the end of the year and published in the new year."
Oranga Tamariki did not wish to comment further