There is no such thing as a silly question so please dont worry.If you dont ask something you will never know and that is how we all learn.
The government have many government agency computer systems that are linked that run 24/7 with data that is matched. ie the tax office, child support, centrelink etc.. That is how they find out a lot of things. They also would rely on people like Doctors, specialists, hospitals, DOCS, schools, daycare centres,centrelink, police,youth clubs,church groups,welfare agencies, ambulance, fireman, life guards etc anyone that has contact with children. Never under estimate what people see and report ie neighbours, ex partners, friends and relatives. I have worked in places where fellow staff members have seen behaviour that was concerning and contacted either police or DOCS. I know a lady who saw another lady hit her child around the head while putting him in the car and threaten him. She took down her rego and contacted the police.
Big Brother is always watching and I dont mean the one that lives in Dreamworld..lol People see and know more then you think and although they tend to turn a blind eye to adults behaviour when it involves children being mistreated even the hardest person tend to stick their necks out to stop it.
Hope that answers your question.