CYFs says Two Whangarei brothers, one not yet in his teens, allegedly compiled a "sex list" of girls they wanted to sexually abuse and what they intended doing to them.
Twelve of the 16 girls on the hit-list were allegedly molested but, despite Child Youth and Family being told, nothing was done.
CYF has issued an apology to the parents of the girls, from Onerahi, and admitted a "major failure" in not letting them know of the list and its graphic contents.
The list was passed to a social worker by the boys' mother in August 2006, but deputy CYF chief executive Ray Smith said the social worker might not have taken the list seriously enough.
The father of one of the girls is furious it took CYF and police many months to act despite repeated requests by some of the girls' parents.
The man said he had also voiced concerns about the safety of the boys' younger siblings, and the effects on girls who had been, or were, potential victims.
He said he knew of at least 28 girls allegedly abused or targeted by the boys whom he described as "sexual predators".
Some of that abuse involved the boys touching a girl through her underwear, which the man said police told him was "minor" offending.
He said he was told just before Christmas the matter had not been dealt with because it was "low priority".
"I'm thinking to myself, 28 girls? What is top priority then?"
He was also angry that, when CYF did decide to act, it used a community meeting to let parents know what was happening.
"But when CYF came through with that apology, I just felt relief. I felt huge relief that this case might now be given proper attention."
The matter was aired on TV3's 60 minutes programme last night.
Mr Smith said the department had let the girls and their families down, had failed to communicate and failed to act quickly enough.
He said the boys were young, aged 11 and 13, when they allegedly first started acting out the behaviours.
"I think the social worker ... looked at a list and wasn't sure whether these were the acts of fantasy, a game of two boys." Mr Smith said.
"It turned out to be a predetermined set of actions of those two boys."
Mr Smith said CYF learned of the list in August 2006 - but a social work plan developed to address the matter wasn't implemented for 15 months.
"It is now clear that we shouldn't have relied on a community meeting to report back on this case. The families should have been personally contacted.
"I'm very sorry that we didn't act quicker in this matter ... I still don't understand why the actions agreed to after the August 2006 notification weren't carried out," Mr Smith said.
"I've asked for a full review of this case by the chief social worker to identify where individual accountability should sit."
He said the sexual abuse of a child is every parent's worst nightmare. "Our work on this case has let the families down and the community down."
A Whangarei police spokeswoman said that the matter was still under investigation and as it involved young children she could not comment further.