In addition to the Department of Social Services, the audit covered Sacramento, Alameda and Fresno county child welfare services.
Social Services officials were advised three years ago to utilize the database to identify any offenders, but the auditor's office said Social Services failed to do so.
State Auditor Elaine Howle said about 600 of the addresses were tied to high-risk offenders. She also said that while counties generally do perform background checks on individuals prior to placing children in foster homes, counties fail to consistently notify state licensing officials or quickly report abuse and neglect to the state Department of Justice.
Since notification of the address matches in July, the Department of Social Services has revoked or suspended eight licenses. Social Services and county agencies have also found six cases in which registered sex offenders were living or present at licensed facilities. The department also barred 36 individuals from being at the sites.
Assemblyman Henry Perea, D-Fresno, prompted the audit after the deaths of several foster care children were reported.
The Associated Press contributed to this story.