He is now facing three charges of burglary before the Youth Court.
"If it hadn't have been for [CYF] not doing their job properly this never would have happened," his grandmother told the Otago Daily Times yesterday.
"I'm just so angry."
The boy was now staying with her, in the days before another appearance in court next week, but she could not understand why CYF did not place him with her in the first instance.
The 14-year-old had stayed with her daughter - his aunt - but continued to run away and clashed with his cousin.
Police became involved about a week ago when he ran away again and showed up at the Brockville address.
"It's not a good environment," his grandmother said.
"There's a lot of drugs going on there.
"I went up there last night to get his stuff and it's a filthy hovel. [He] likes going there because he gets to do what he likes.
"He's a good kid deep down, but he's got a lot of problems. He needs a lot of help, but placing him back there, even for three days, isn't helping."
Dunedin youth aid Sergeant Rene Aarsen said CYF had been alerted to issues concerning the address.
"We have some concerns around that address, and we spoke to a senior social worker about our concerns with that address and some associates of that address," he said.
"It wasn't appropriate for a young person to be placed there," Sgt Aarsen said.
It is understood CYF's decision was undertaken without the knowledge of police and has left officers shocked.
The boy's grandmother said she confronted the social worker who made the decision following the boy's first appearance in court on Tuesday, but was offered no explanation.
"As we were leaving she [the social worker] said to [the boy] 'I'll see you on Monday'," the woman said.
"I turned back to her and said 'none of this would have happened if you and CYF had done your job properly. You had other options; I offered to have him. This wouldn't have happened', and she looked at me and said 'Yeah'.
"I just walked off, I was so angry."
The ministry refused an interview between the ODT and any staff of the unit.
Questions about how the situation occurred went unanswered and the ministry provided only a brief statement which said: "While we're very mindful of the vulnerability of this young person and we continue to work closely with him and his family, his current circumstances mean that he is now in front of the Youth Court.
"We don't believe it is in this young person's best interests to comment while that process is under way."