Parentline, an organisation that was supposed to link families and young people to support services in the territory's community sector, says it did fulfil its obligation to refer clients needing assistance on to service providers.

But the Community Services Directorate says Parentline failed to implement basic processes, including keeping a database of services with vacancies and securing written agreements with providers to allow for referrals to be made.

The directorate's deputy director general Maureen Sheehan said the support group was advised of these problems for ''many months'' before its funding was terminated on Tuesday.

The government has established a new consortium of providers, including Barnardos, Belconnen Community Service and Woden Community Service, to continue the service provided by Parentline.

Parentline manager Larissa Dann said the not-for-profit group would be forced to shut down the telephone counselling service it had provided for 34 years to Canberra families because of the funding withdrawal.

Ms Dann said the organisation was aware the government had broad issues with how it was fulfilling its role as a one-stop service for vulnerable families and young people, but it was not given ''specific problems'' to address.

''We responded to concerns from the government with the steps that we'd take and I believe we made those steps,'' she said.

''But it was hard because we weren't given specific problems.''

Ms Dann said the group had issued 1200 referrals since March, but its definition of what constituted a referral differed to that of the ACT government.

''If we talk with someone and we judge that they are quite well resourced we give them some numbers and tell them who to call,'' she said.

''That's an empowering model - we let them make the call.

''But more likely we contact the service on the caller's behalf and then we go back to the caller.

''I think they [Community Services] have a different definition of what a referral is.

''I think their definition of referrals is written referrals.''

But Ms Sheehan said the directorate had been writing to Parentline since May about problems with the service.

''There was written correspondence, meetings with staff and the board of Parentline to raise concerns about their performance or lack of performance,'' she said.

''They were very specific around the fact that Parentline should have been the central information and referral service for a whole new service system for the child, youth and family support program that is worth $8 million.

''Parentline saw themselves as a telephone counselling service and that was one small part of what they needed to do.''

Ms Sheehan said she had met with the organisation and given specific instructions about what it needed to do to improve its referral process.

''Where are your agreements with service providers so you can make a referral?

''Where are your lists of vacancies so you know which services have places available?

''Where are your waiting lists?

''It's not about the definition of a word, it's about whether a service was given to people who needed it.

''We didn't pay Parentline $800,000 a year to hand out telephone numbers.''

Ms Sheehan said counselling would still be offered by the new consortium, called the ''Child Youth and Family Gateway'', that was now operating as a replacement to Parentline.

The service can be reached on 1800 647 831.