The royal commission into child sex abuse has been told the Salvation Army wanted to know why a complaint against an officer had to involve police.

The Salvation Army wanted to know why the NSW department of child welfare had not let them handle a child sex abuse allegation against one of their officers instead of going to police, an inquiry has heard.

The chief executive of the NSW Department of Community Services, Maree Walk gave evidence at a public hearing of the royal commission into child sexual abuse in Sydney on Thursday.

Her evidence was based on a review of how the department supervised two Salvation Army homes in the 1970s – Bexley Boys’ Home in Sydney’s south and the Gill Memorial Home in Goulburn.

Documents showed that in February 1974, a NSW welfare officer reported to police that the manager of the Gill home, who has been identified as X17, had indecently assaulted a boy.

Records also show a Salvation Army officer identified as Major X4 called the department “to raise the question of why the matter had not been handled by way of reference direct to the Salvation Army”.

The welfare officer at the time responded that the provision of the law required it be referred and wrote a memo saying “Major X4 was obviously disappointed in this attitude, but I am still of the opinion that was the correct course to take”.

Ms Walk who has been in the CEO’s role for two years said she did not know why an allegation against another officer at Gill, made almost immediately after the one against X17, was not reported to police.

She said the thinking within the department then would have been that the right thing to do was to go to police.

Documents also showed there were 59 reports of boys absconding from Bexley during 1974.

Ms Walk agreed that, based on evidence to the commission this week by former residents of Bexley, it was reasonable to assume sexual abuse by the then manager, Captain Lawrence Wilson, was a contributory factor to the boys running away.

Mr Lawrence, who died in 2008, has been mentioned by the commission as the most prolific abuser, among a group of five Salvation Army officers about whom complaints have been received.

It has also been alleged that Mr Wilson was involved in a pedophile ring.

When asked if welfare officers interacted with the home in a way that would enable them to pick up on sexual abuse, Ms Walk said the documents she reviewed show there was concern about low morale at Bexley but no mention of sexual abuse.

The commission heard the reports about Bexley, although frequent, were cursory and covered general health and wellbeing, not specific complaints from children.

Poor supervision by Mr Wilson was identified as the reason children were running away.

There was evidence of physical abuse at both Bexley and Gill and questions about whether the level of punishment was in line with regulations.

Ms Walk was asked by Simeon Beckett, counsel assisting the commission if she thought potential repercussions from the Salvation Army were the reason physical abuse was not reported to police.

She said she thought attitudes at the time were to blame.

Earlier on Thursday the commission was told by Janice Doyle, a former senior public servant in Queensland, that the level of political interference in child welfare matters in the state was “absolutely horrendous”.

She also said that governments had always provided a poor service for poor children.

The hearing continues on Friday.