Wirral Council has paid £10,350 compensation to two foster carers for failing to support them after an emergency placement.
The council also failed to make even basic checks before placing two children in foster care, the Local Government Ombudsman found.
The children, aged eight and 10, were those of the foster carer's former partner. They were placed with him and his adult daughter after claims of neglect were made against their mother in 2004.
However, the council did not check the foster carers or the accommodation before the placement, and failed to visit the children early in the placement. They also failed to provide adequate financial or social work support.
Ombudsman Anne Seex said: "[The foster carer] and his daughter have proved to be appropriate carers who have apparently done an excellent job in looking after the children who have come to no harm. This is no thanks to the council."
Phil Davies, the Wirral Council cabinet member for children's services, said: "We would like to sincerely apologise to the family, and assure them and the public that all necessary steps will be taken to remedy the matters highlighted in the report."