The New South Wales government has apologised after admitting it left two foster children in a home with a convicted triple killer until this week, despite a report warning them of the situation in December.

The NSW minister for families and communities, Kate Washington, told 2GB radio on Wednesday morning that Regina Arthurell had been removed from a home where she had been living with foster children aged 12 and 14, after the radio station revealed the situation on Monday.

“It is entirely unacceptable for a vulnerable child in the care of the state to be living with a triple [killer]. It should never have happened and I’m deeply apologetic for what has happened,” she said.

Washington, who has announced an urgent review, revealed her department had been made aware of the situation in late December, but confirmed that Arthurell had not been removed from the children until Monday.

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Arthurell, who identifies as a transgender woman, was convicted of two counts of manslaughter and one count of murder over three killings carried out when she presented as a man. They include manslaughter convictions for the stabbing to death of her stepfather in 1974, and the killing of a 19-year-old in a robbery in the Northern Territory in 1981.

While on parole for manslaughter in 1995, Arthurell bludgeoned to death her former partner Venet Raylee Mulhall at her Coonabarabran home in central NSW, and was sentenced to 24 years in prison for murder, before being released in November 2020 and placed on an extended supervision order (ESO).

At a hearing in 2021, a supreme court justice said Arthurell was making sincere efforts at rehabilitation but had a “proclivity to violently terminate the lives of fellow human beings”.

On Wednesday, Washington said she was concerned by a report from a 2GB caller, who identified herself as the daughter of the woman Arthurell had been living with, who said she had also alerted NSW police and Corrective Services this year after attempts to warn government departments last year were unsuccessful.

“It would appear that there have been multiple system failures that have led to us to this point,” said Washington.

Washington said there were “complexities” in the situation that she couldn’t share publicly to protect the privacy of the children. She said a review would look into “the decision-making that led to this terrible decision”.

At budget estimates on Wednesday, the NSW attorney general, Michael Daley, was asked why his department had not extended the ESO for Arthurell after it expired in December 2024.

“There’s a high risk offenders assessment committee which is chaired by the commissioner for Corrective Services, and it did not refer Ms Arthurell to the attorney general for consideration for further application under the act,” he said.

NSW police and NSW Corrective Services have been contacted for comment.