The pro-bono investigation by law firm Wilmer Cutler Pickering Hale and Dorr and audit specialist PricewaterhouseCoopers said Harriette Walters - an employee of the office with 20 years' standing - committed the fraud by issuing bogus reimbursement checks, Business Journal stated.
Ms Walters pleaded guilty to fraud charges stretching back to 1987 in connection with the case in September and contributed to the report's findings.
After examining around 680,000 electronic and hardcopy documents, investigators concluded that she was able to perpetrate the "long-standing fraud" because of a "failure of controls, a dysfunctional work environment and a lack of oversight".
The report recommended the development of "more detailed" procedures and reducing the OTR's reliance on manual transaction processing.
Business Journal noted that since the fraud came to light, a number of personnel and policy changes have been implemented at the office, including the dismissal of its former director.
OTR is responsible to administering tax collection in the District of Columbia.