A council is to address criticisms of its handling of a case of four children under protection who were identified as being at risk of sexual grooming.
The ombudsman said many issues could have been avoided
The Public Services Ombudsman for Wales, Adam Peat, said Flintshire council should apologise and pay their mother £4,000 for the distress caused.
The watchdog also ordered compensation to be paid to one of her daughters.
He also said the council should review its case-recording and the way in which child protection work was allocated.
The children in the family were placed on the child protection register in July 2003.
Mr Peat said Flintshire Council had considered the two girls and boys, who were then aged between 10 and 16, were "at risk of significant harm" from the family's lodger, who has since died.
The man who had struck up a friendship with the youngsters before moving into their home was suspected of "grooming" the children for sexual abuse and also physical abuse.
The mother and her daughter asked the ombudsman to investigate after first complaining to Flintshire Council about a number of aspects of staff's handling of the case.
Criticisms against the council included the way some interviews with the children - in which they denied any abuse by the lodger - had been conducted.
They were also unhappy that officers involved in the case had not listened to the family's views.
The ombudsman said he found "there had been repeated and prolonged maladministration" in in the way in which the council had dealt with the woman and her children.
He said the decision of the child protection case conference to place the children on the register was "not inappropriate".
Mr Peat said he was of the "firm view" that if the council dealt with the matter appropriately and in line with child protection procedures from the outset, many of the issues which had caused the family concern could have been avoided.
As well as recommending the apology and the £4,000 payout to the mother, the ombudsman said another £1,000 should go to one of her daughters for the distress she in particular was caused,
In addition the ombudsman recommended both mother and daughter should be paid £300 each by the council for the "additional distress and trouble caused to them by its poor handling of their complaints".
The ombudsman said the council should in future ensure staff working with child protection cases have appropriate training and experience and that they are properly supervised.
A Flintshire Council spokesman said it has had "extensive consultations" with the ombudsman's office.
"There was no criticism from either the ombudsman or his professional advisor about the fact that the children were placed on the register.
"But there was some criticism of associated processes that the council have taken on board and are addressing."