One of the truths that is revealed by the film is that if agencies charged with working with children are not subject to external oversight, more harm can be inflicted on the children sent there than if they were left outside of it. The fact that the sexual and emotional abuse was perpetrated inside the walls of the agency charged with rehabilitating the children helps to highlight the importance and need for regulation and strict oversight. Certainly, children who are "on the border" can be pushed over it and beyond it if they are exposed to harsher and more brutal conditions inside an institution. Part of the reason why it's worse for them on the inside if such abuses happen is because of the unfathomable level of hypocrisy that results. When told to place their trust in the system, they have been violated on both physical/ emotional and faith- based levels. This aspect is almost insurmountable.
The answer is absolutely it can. In fact, a traumatic experience such as sexual and physical abuse for anyone, regardless of age, can change a person for life, and often can lead to very negative, self-destructive behavior on the part of the victim. What many psychologists and psychiatrists will tell you is that such crimes against children magnify the effects in adulthood. It changes them during a mentally, physically and emotionally developmental stage in their lives that can change them drastically as adults. It can also lead to bitterness and anger, unresolved rage, all sorts of issues that could possibly lead to delinquency.
There are also a number of studies suggesting that victims of sexual abuse as children are more likely to become abusers themselves, although this idea is still controversial and certainly not proven beyond doubt.
As a social worker as well as a teacher, I can tell you that trauma can have a significant impact on a person and the outcome of his life. So often adults feel that children see but do not understand a situation. This is very true but the child's own perspective on the situation what makes processing the situation or event so difficult.
An adult may even try to explain and help a child work through an issue or trauma but if the child can not cognitively process the information correctly, the child will continue to experience the trauma as perceived. Some traumatic events are what they are and are just plain damaging. Sexual abuse often leaves the victim feeling stained and dirty leading to the continuation of the action instead of the person protecting others (not in all cases). Physical abuse often creates a continuing cycle as well.
It only takes one moment to change the direction of a person's life whether they are a child or an adult, but it is far worse in the case of a cognitively developing human.