The issue here is that the woman represented herself as someone who works for the agency. She then used the agency logo, fees etc. Stealing from them, in essence, service.
The agency still allows her to advertise and they represent her. They need to let her go. If there is NO knowledge of outside hiring, maybe legal responsibility is not on them. If they know or allow for it, and still represent she is a good fit for child care, then they ARE somewhat responsible. U would need to prove they either allow or have knowledge that outside arrangements are made. Some agencies only do an initial matching while others expect to be full service. U need to find out what exactly the agency does and doesn't do.

Then it sounds like op let some very small things go. Sometimes, we want to give people a second chance. Cancellation- not fault of sitter - not a red flag. Letting a child run around in a lobby isn't "dangerous" in it of itself. The having to be asked to round up the child is annoying, again not dangerous. However, these are just small red flags one doesn't see, especially if the kids like the sitter. It is very easy to let those small things slide. Leigh was being somewhat harsh as none of the prior things u posted hinted that the woman was placing kids in danger. Laziness bc mom is THERE is not exactly cause to believe that the sitter will be automatically neglectful. Some people believe if the parent is right there, the parent has the primary obligation to step in, especially if no start time was given. At this point, we only know the sitter was present--- not on the job yet. Maybe the sitter needed to be told " ok the clock starts at the hotel" I would expect to be told this so I know how to charge. Not enough info in the post to know when the clock started. Hindsight...that's what all this is.
But this pool incident is 100% VERY MUCH a reason never to bring the children back to her. U need to TELL her the truth. Don't make up excuses, just straight call her out. She may deny it she may not and think its no biggie as nothing happened, but u need to make sure she knows it IS a big deal. U also need to report her to cps sp she doesn't do this to someone else's kids.

Sorry this happened op this sucks.
Now u got to make sure that u take action.

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