Youths in Victoria's child protection system have been sexually assaulted while in residential care and likely prescribed drugs to manage their behaviour, according to a report which reveals a litany of failures.
The state ombudsman has called for major reforms after investigating allegations around five children living in residential units.
One 13-year-old girl, who has autism spectrum disorder, was raped by a man at his home five months after being placed in residential care in 2018.
She was meant to be the only child in her unit because of her complex needs but the facility was "pressured" by Child Protection to accept other children in the unit, the report said.
After this, her behaviour deteriorated and she began using drugs.
"Residential care is meant to provide a safe place for children who cannot live safely at home. In the case of these five children, that system failed," the report, released on Thursday, concluded.
One teenage girl was raped by three men after running away from care, while a transgender girl was continually sexually assaulted by another resident.
Some of the assaults have been proven in court, while, in others, there was insufficient evidence to proceed.
The ombudsman said Child Protection and government representatives spoke of a stretched system where workers are forced to take the "least worst" option for children's care due to a lack of available beds.
"Evidence shows the experiences of the five children are not new or isolated," the report read.
"Over the last decade, many oversight bodies have warned of significant and systemic problems with the residential care system."
Staff were sometimes unclear about the children's safety plans, which are meant to be implemented when they don't return, the report said, and steps taken to find them were "varied".
The investigation also found instances where police weren't told of possible criminal offences against the children.
Three of the five children may have been medicated to manage or control their behaviour.
Nearly 1000 Victorian children lived in residential care at some time during 2019-20.
The report called for several reforms, including reducing residential care units from four beds to two beds, with greater access to mental health and educational services.
It also called for the creation of an independent advocate to promote the rights of children in care and a state-wide medication management policy.
The Victorian government has adopted the reforms in principle.
"This is a very challenging area. We know that consistent investment is the most important thing," Premier Daniel Andrews told reporters.
"We've invested $2 billion in this space and not just more money for the same but more money for reform and for change."