Tasmania's out-of-home care system features a concerning lack of transparency and an over-representation of Aboriginal children, while state government funding for its needs is on the slide.

Commissioner for Children and Young People Leanne McLean says there is also a lack of data about care plans for children and how often they are visited by safety workers.

Her second out-of-home care monitoring report, examining data from 2020/21, follows last year's hearings conducted by a commission of inquiry into child sexual abuse in state government institutions, which is set to deliver a final report in May.

"Despite significant public interest in the Tasmanian out-of-home care system, there is a concerning lack of transparency regarding its operation," she said.

"While national reporting bodies publish some Tasmanian data, the out-of-home care system remains largely opaque.

"This limits effective system oversight and raises questions about how the government is meeting its financial and social obligations to care for our most vulnerable children."

There were 1077 Tasmanian children in out-of-home care - defined as overnight care for people under 18 who are unable to live with their families due to safety concerns - in June 2021.

The figure equates to 9.6 children per 1000, the third-highest rate amongst the states and territories.

Ms McLean said the number of children in care and rate of children in care had increased from 2017.

More than 40 per cent of those on guardian and custody orders did not have a current case and care plan approved in the previous year.

Only 56 per cent of required visits to children by child safety officers were conducted within required timeframes, the report says.

Ms McLean said due to the implementation of a new model of care, accurate data about the number of children with individual care plans and those visited within appropriate timeframes were not available.

"This must be urgently addressed," she added.

In a response included in the report, Tasmania's Department for Education, Children and Young People said a care plan was "one output" of a care team and "taken alone, shouldn't be considered a sound proxy indicator for quality case planning and decision-making processes for children".

"(A) fundamental practice shift has progressed ahead of the capability of the information system to guide and capture this important activity in a way that can be accurately and meaningfully reported and monitored," it said.

The rate of Indigenous children in out-of-home care was five times higher than non-Indigenous counterparts.

Ms McLean said there was a lack of accurate data about whether Indigenous children were being placed in accordance with a policy acknowledging their culture.

State government investment, as measured by real recurrent expenditure across both residential and non-residential out-of-home care services, had declined more than $16 million, or 17.6 per cent since a peak in 2018/19, according to productivity commission figures in the report.

Premier Jeremy Rockliff said the government would work with the commissioner to ensure communication and services could be improved.