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Three Destiny Church members have resigned from a taxpayer-funded foster organisation after an inquiry criticised "conflicts of interest".

Child Youth and Family launched an inquiry after concerns emerged over connections between the church and the Open Home Foundation's Taranaki branch.

The report identified "serious threats" caused by the handling of the foundation's links with Destiny Church.

The concerns followed accusations against an adult son and daughter of Destiny Church Taranaki pastor Robyn Edmonds, who managed the foster organisation branch.

Joshua Edmonds, 29, was facing a criminal charge of indecent assault against a 13-year-old girl. The charge was dropped last month.

Rebekah Noble, aged in her 30s, had a relationship with a 16-year-old boy.

Both teens had been placed in foster homes by the Open Home Foundation. Edmonds, and her husband and co-pastor Lee, resigned as pastors in April.

Foundation chief executive Russell Martin said Edmonds had allowed work, home and church to merge and create "conflicts of interest".

Martin said the conflict existed through Edmonds' connection to the church and then increased when three existing staff members joined Destiny Church "and she became their pastor and employer".

He said there were no safety issues for children placed by the Open Home Foundation in Taranaki.

The foundation's systems had been investigated and changes had been made. A national review ensured no similar conflicts existed, he said.

Child Youth and Family boss Ray Smith said there were "significant concerns" that professional relationships were "compromised".

The report found senior foundation staff had "inappropriately managed or supervised complex casework situations involving close members of their family".

Edmonds told the Taranaki Daily News she had a "clear conscience" over her actions.

"OHF was aware of all my positions when they hired me.

"Every time my children were involved in anything, I immediately disclosed it to my manager and never did I act without my senior manager knowing."