An orphanage using the name of an Australian Bali bombing victim has been accused of sourcing children with living parents from a remote island to help solicit donations from western tourists.

Former workers at Jodie O’Shea House, one of Bali’s biggest institutions for children, made a detailed complaint about its activities to Save the Children, which passed it on to Indonesian authorities.

The owners strongly denied the allegations in the complaint, and Indonesia’s social affairs ministry was unable to verify the most serious claims when it carried out an inspection.

The Indonesian government said it was continuing to monitor the institution and the ministry has requested a further report from local officials.

The center was founded as the Jodie O’Shea Orphanage in 2005. Its British founder, Alison Chester, said she named it after O’Shea, whom she had visited as the 29-year-old Sydneysider lay dying in hospital after the 2002 Bali attacks.

It now houses 94 children and has become a prime destination for well-meaning Australian and other western tourists.

Former volunteers and staff, in interviews with the Guardian, said up to five tour groups could be moved through the orphanage each day, bringing donations, potential sponsorships, food, and gifts.

Only a handful of the children are orphans, despite the institution marketing itself as an orphanage for more than a decade.

Chester confirmed only six of the children were without both parents, 64 had a single parent living, 14 had both parents alive and 10 were described as “special cases”. She said she had never hidden the fact that some children had parents, and the center’s website carried that information.

In recent months, as pressure mounted in the Australian parliament to stop orphanage tourism, the institution rebranded itself as Jodie O’Shea House. The word “orphanage” has been removed from parts of its website.

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