Fewer than one in five children at risk of harm in the Illawarra and Shoalhaven are being visited or assessed by a community services caseworker.
The number of children from the region notified to the Department of Family and Community Services (FACS) as being at risk of significant harm hit 4504 in the June 2014 quarter - up nearly 500 from the September 2013 quarter.
The government's community services caseworker figures reveal that just 854 - or 19 per cent - of these children received a face-to-face assessment by a caseworker.
That meant 3650 children were not assessed by a caseworker.
Opposition community services spokeswoman Linda Burney said the figures showed the Baird government had "failed" the Illawarra Shoalhaven region.
"The rise in child abuse reports in Illawarra Shoalhaven is nothing short of heartbreaking," Ms Burney said.
"Cases are now at a record high and the region's child protection services are struggling to cope.
"A figure like 3650 isn't simply a statistic. We are talking about 3650 children in the Illawarra who are living in tragic circumstances - and for whom every hour of every day is an ordeal.
"[FACS] is getting round to less than one in five children in the Illawarra whose cases are brought to its attention. That is simply unacceptable. The crisis in the Illawarra is worse than most places in the state."
Ms Burney said there was a child protection crisis across the state, with the number of at-risk children climbing to 72,243 in the June quarter.
She said 53,151 of these children had not been visited by a caseworker despite the "serious risk to their health and safety".
The situation in the Illawarra Shoalhaven had declined since the September 2013 quarter when nearly one in four (23 per cent) of the 4011 at-risk children were assessed.
"Demand for child protection services in the Illawarra is outstripping the ability of caseworkers to meet it," Ms Burney said.
"The government needs to put more focus on intensive early intervention programs that work with families and reduce child abuse in the first place.
"In nearly four years, the Baird Liberal government has failed to get on top of this issue and the Illawarra seems to be dead last on its list of priorities."
A spokesman for the Department of Family and Community Services said an extra 86 caseworkers had been employed across NSW in the past quarter.
Despite caseworker shortages in the past, the figures showed Illawarra Shoalhaven now had 113 caseworkers - six above the quota.
However, Public Service Association regional organiser Tony Heathwood said many of those roles were temporary and there was a high turnover of staff.