The Green Party has won an apology from Social Development Minister Anne Tolley after it was confirmed Serco staff members had visited Child, Youth and Family sites.
Having received the apology, Green Party Jan Logie questioned if the "circling interest" of the British company and a decision not to fund the child advocacy service revealed a privatisation agenda.
That was strongly denied by Ms Tolley, who told Ms Logie to remove her tin hat.
"If the member reads the report that I released today [on CYF's future], no decisions have been made about what to fund and what not to fund. So stop looking for secret agendas."
Corrections took control of Mt Eden prison off Serco after allegations of serious violence there.
Despite that rolling controversy, Ms Tolley has said she would still be open to Serco - which is looking at running child services in the UK - being contracted to provide more social services.
In question time today Ms Tolley was asked by Ms Logie whether she stood by an answer to a written question, which stated that she was not aware of such a visit having ever occurred.
The minister said that her previous answer had been based on wrong information provided by the Ministry of Social Development, and she apologised.
This morning MSD advised her that case managers from the Serco-run South Auckland Correctional Facility had visited the youth justice residence Korowai Manaaki.
"I have also been made aware that case managers from the Serco-managed site visited other CYFs sites to discuss the relationship between the prison and CYF, and/or the transition and management of young people from youth justice into adult corrections systems," Ms Tolley said.
"I make the point that Korowai Manaaki and South Auckland Correctional Facility are next door to each other."
Ms Tolley said she was disappointed that she received incorrect information, but was pleased the case managers had visited CYF sites.
"The management of young people from youth justice into the prison system, it is absolutely essential...that there was a good relationship to manage that transition."
Meanwhile, NZ First spokesman for social development Darroch Ball called for immediate intervention at Korowai Manaaki.
"New Zealand First has received information containing serious allegations about unsafe practices at this Youth Facility.
"The fact that youth workers within Korowai Manaaki have contacted New Zealand First shows the Minister needs to step in immediately."
Mr Ball said allegations included security issues, sim cards and mobile phones being smuggled in, and multiple assaults.
Responding to Mr Ball in question time, Ms Tolley said there was a wider issue that such youth facilities were being used for those on remand.
"Young people can be staying one, two nights, sometimes up for a week...I think that is of great concern, it is a security concern," Ms Tolley said.
Yesterday an interim report by a panel that is reviewing CYF was released by Ms Tolley. A more detailed agenda for change will come in a final report, due in December.
"As the panel [reviewing CYF] in the report show, we do need to have a close look at a better way of dealing with young offenders, and we will do that."
Ms Tolley said she was happy to have investigated any allegations, if Mr Ball would bring them to her.