A Victorian report into the sexual exploitation of children in state care has called for substantial changes to the residential care system and the handling of such exploitation of vulnerable children.
The report, by the Commission for Children and Young People, was triggered by the dawning realisation that children in the state's residential care system, which houses many children with a history of abuse and trauma, were suffering sexual abuse at the hands of other children and predators from outside the system.
"This is due to the Department's inadequate and inconsistent record keeping, which has resulted in poor data availability," the report read.
"The data is unreliable and this is made even worse by current reporting systems. The commission witnessed inconsistencies in the way that serious allegations of sexual abuse and sexual exploitation in residential care are defined, reported and investigated."
Inadequate staffing, poor reporting practices, poor placement decisions, the widespread use of social media and a lack of independent oversight contributed to the abuse, the report found.
The report analysed 189 reports of sexual exploitation, relating to 166 children, all filed in the period from January 2013 to April this year.
However, in what the commission described as an oversight by the Department of Human Services, 402 incident reports were not provided to investigators until a year after the commencement of the inquiry, and are therefore not included in the final report.
The report recommended a reduction in the 500 children currently in residential care, an urgent upgrade of the units housing the children, improved staff qualifications and training, an independent body that children could lodge complaints with, and linking funding to the organisations that run the units to concrete outcomes for the children.
"Many children in residential care live in appalling physical conditions as evidenced through this report," the report said.
"Despite large financial contributions by government, we found numerous children and young people living in sub-standard conditions.
"Poor physical environments are not conducive to children remaining at home. Many children were absent, and their whereabouts unknown when the commission visited. These absences can result in children being at risk of sexual abuse and exploitation by external predators.
"The low skill base of some direct-care staff — some of whom are unqualified, unsupported and poorly supervised — is completely inadequate for the unique needs of children living in residential care."
The role of pornography and social media was also canvassed, with many of the children initially making contact with their abusers via social media apps such as Facebook.
"There was strong evidence that pornography, social media and the internet play a significant role in the lives of children in residential care," the report said.
"Whilst these are issues for the community in general, traumatised and abused children are particularly vulnerable to exploitation."
In March last year, the ABC revealed groups of men were targeting children in residential care for sex in exchange for drugs, alcohol, cigarettes and consumer goods.
Further investigation by the ABC uncovered horrific sexual and physical abuse of children in residential care by older children in the same units.
In the case of a brother and sister abused by older children in the units, a Victorian magistrate said the secretary of the then Human Services Department, Gill Callister, had fundamentally breached her duty of care to the children.
It was also discovered casual agencies were placing staff in units without valid police checks.
'Deplorable' conditions in residential units
The commission's report was sharply critical of conditions in some of the residential units inspected during its investigation and criticised the department for allowing children to be housed in squalid conditions.
Photographs taken by investigators show homes strewn with graffiti with holes in plaster and walls left unrepaired.
"They were stark and derelict and some punitive practices were observed," the report said.
"Such environments do not reflect community expectations of a 'home', nor do they create an atmosphere where children feel safe and supported. There seems little incentive for children to stay."
The conditions in some of the homes made it more likely that children would abscond, in turn making them more vulnerable to sexual abuse and exploitation, the report said.
Government supports all recommendations 'in principle'
Victorian Commissioner for Children and Young People Bernie Geary said changes to the child protection system could not be treated as a "game of politics".
"Both houses of Parliament have sat over this terrible system," he said.
"It's not a game of politics, it's a system that needs to be looked at for the case of our most vulnerable children.
"We've got a royal commission that's operating at the moment that's looking at what happened in the 1950s, 1960s and 1970s, and here I am sitting here talking about what's happening this week, last week, the week before, in relation to kids who are in the care of the State Government.
"That is the most frustrating and shocking issue here."
Families, Children and Youth Affairs Minister Jenny Mikakos said she welcomed the commission's report and gave "in principle" support to the report's nine recommendations.
"This report makes for very disturbing reading and it raises a number of concerns," Ms Mikakos said.
"The report confirms media reports last year that predators are preying on children in the residential care system, that they are targeting and grooming these children."
Ms Mikakos said the Government was in the process of recruiting 110 new child protection workers, but conceded the system was under immense pressure.
Since coming to office, the Labor Government has pledged to employ four extra child protection workers to target and disrupt the sexual exploitation of children in residential care units by outside predators.
Earlier this year, the Government also announced every unit in the state would have a "stand-up" staff member on duty overnight, which staff at the units have nominated as a key measure to keep the children safer.