Non-government out-of-home care providers are not providing the New South Wales government all the information asked of them, potentially putting children at risk, a parliamentary hearing has heard.

The revelations come as over 14,000 children remain in out-of-home care in NSW - 46 per cent of them Indigenous.

On Monday, NSW Families and Communities Minister Kate Washington faced questions during budget estimates about revelations private, or non-government, out-of-home care (OoHC) providers were being duplicitous in their contact with the government.

Ms Washington, who said the child protection system had "spiralled out of control" under the previous government, told Greens MP Sue Higginson information provided to her department by a non-government provider had been "incorrect".

Asked if this was happening regularly, the Minister said it regrettably was.

"It's regrettable that we had to put a process in place to try to track what we were getting back, but it proved to be important because it did show that there was a significant problem," she told estimates.

"Since we had that process in place, I think it's about 100 per cent, almost all of the information that we were getting wasn't either accurate—and about close to 90 per cent was significantly lacking in information."

Ms Higginson said the revelation that non-government service providers in the system were misleading the Minister and the government was "beyond appalling".

"This should shock every single person who has ever engaged with the OoHC sector," she said.

"It lays bare the deeply flawed nature of a system which is meant to protect and care for vulnerable young people.

"Instead, what we see is that 100 per cent of these essential service providers are failing in their interactions with the Department of Communities and Justice to provide accurate information."

The Greens spokesperson for justice said the revelation of non-government carers failing to provide information to the government had come to her office through the "strong advocacy of an Aboriginal mother who was raising concerns about her child".

"Had this information not been requested, it is unclear when this extreme failure would have been revealed," Ms Higginson said.

While not addressing the data mentioned in budget estimates directly, SNAICC chief executive Catherine Liddle reiterated to National Indigenous Times her long-held argument - outlined in their Family Matters report - that the current system is failing Aboriginal and Torres Strait Islander children.

"What will turn the tide of the gross over-representation of our children in the child protection system is investing in Aboriginal community-controlled early years and care," Ms Liddle said.

"As last month's Productivity Commission review into the National Agreement on Closing the Gap clearly stated, if we are to change outcomes for our children it cannot continue as business as usual."

The revelation in budget estimates comes amid a troubling time for the child-protection system, which has come under fire for a series of high-profile revelations involving Aboriginal children. In January, it was revealed two Indigenous children were stranded in the UK without a passport, visa, or any access to their community and culture. They were brought home last month.

On Monday, the NSW government said they were stripping responsibility from private providers who take an extended period of time to find permanent placements for children.

The Sydney Morning Herald previously reported children as young as one year-old were spending hundreds of days in emergency care.

On Monday, the same publication reported the Department of Communities and Justice (DCJ) removed two children, aged 11 and 14, from emergency care, having spent 118 days there, after the non-government provider only did "minimal work" to find the children another foster placement.

The government said there are 71 fewer children in emergency accommodation since the creation of a specialist team within the DCJ to remove. The High-Cost Emergency Arrangements (HCEA) places children and young people in private accommodation - including hotels, motels and serviced apartments - cared for by a rotating roster of shift workers.

Ms Washington said she was "shocked" when she was sworn in as minister and found the number of children in HCEA.

"We want to see children in safe and loving homes with people who care about them, not in a hotel or motel with rotating shift workers who might never see the child again," the Minister said.

On Monday, the NSW government said the number of children in HCEA had dropped from 506 in early November to 435 on February 22.

Last month, a new "restoration taskforce" was announced, a collaborative partnership between government and Aboriginal stakeholders, leaders and community representatives, to oversee efforts to see as many Indigenous children returned to their families from the child protection system as is deemed safe.

National Indigenous Times has contacted the Department of Communities and Justice for comment.