Oranga Tamariki has apologised for what the National Party is calling the crass use of auction website TradeMe to find foster parents for children.
The child welfare agency advertised for a caregiver on the site.
One ad on the website described a young Whanganui schoolgirl who had had a tough start in life and needed a forever home.
It also gave her iwi affiliation and called her bright and loving with strong family values.
Ministry chief executive Grainne Moss said the ads were a mistake and said the guidelines will be reviewed.
Minister for Children Tracey Martin said she only found out on Tuesday about the ads.
She said it wasn't the most appropriate website through which to find caregivers for children.
TradeMe has since removed the listings.
Debbie Ngarewa-Packer of the Taranaki iwi Ngāti Ruanui questioned why the child's local iwi hadn't been Oranga Tamariki's first port of call for potential accommodation.
She said iwi need to be part of the solution as there is a high population of Māori children in care.
Ms Ngarewa-Packer said the child's iwi would have happily welcomed the girl with open arms.
"We know that we have good vetted people that are ready to take children."
She said what particularly caused offence was the child's details being revealed, as well as the agency not communicating with the iwi.
Oranga Tamariki manager for Māori Support Services Frana Chase said the ministry had not been connecting strongly enough with whānau, hapū and iwi.
"We have said we need Māori caregivers. We're engaging with all iwi to do that and certainly in the case of this particular iwi, I've been talking with them since this has happened and we've agreed that we'll come together and design a solution that's going to work for their iwi."
She said mistakes were made with putting the advertisement on TradeMe.
"The whakapapa definitely should never have been put up on TradeMe. Whakapapa is a taonga, it's something that we hold precious and that we value, so that was a mistake and we've apologised for that."