US marine officers at all levels failed to investigate conflicting reports of killings in the Iraqi town of Haditha, a report quoted by US media says.
Women and children died in the attack in Haditha
The report has been completed and reviewed by Lt-Gen Peter Chiarelli, the second-ranking US commander in Iraq.
Twenty-four civilians died in the incident in November. The US military initially said they were killed in a bomb blast and exchange of fire.
But reports subsequently emerged alleging that US soldiers killed them.
Gen Chiarelli's investigation is separate from a second, criminal inquiry into whether a group of marines was guilty of murder.
A number of women and children were among those killed in an incident that has become the most serious allegation against US troops in Iraq since the invasion.
Gen Chiarelli's inquiry looked into how the military handled the killings on 19 November.
According to US media reports, Gen Chiarelli has found that senior officers failed to investigate inconsistencies in the initial reports, which suggested the civilians were victims of a roadside bombing.
The New York Times quoted defence department officials as saying Gen Chiarelli concluded "that some officers were derelict in their duties".
The Pentagon has not commented on the media reports.
The officers are said to have ignored contradictory evidence, such as death certificates listing the cause of death as gunshot wounds and compensation payments that were made to the victims' families.
One official has spoken of false and late reporting.
It is not clear which officers have been implicated or what punishment they might face.
Gen Chiarelli has passed his findings and recommendations to the leading US commander in Iraq, Gen George W. Casey.
Lt-Gen Chiarelli has handed his report to Gen George W. Casey
A US military official told the Associated Press news agency the Chiarelli investigation "essentially bolsters the ongoing criminal investigation and lays bare some of the administrative faults that existed during November 2005".
He added: "What some of these people did wrong is certainly not illegal or criminal, but administratively their actions are something that Gen Chiarelli wants to look at."
The findings may be made public over the next two weeks, he said, although material that could affect the criminal investigation would be withheld.
The Haditha inquiry is just one of a number the US military has been conducting into incidents of alleged unlawful killings by US forces in Iraq.
Haditha has drawn comparisons with the Vietnam War massacre at My Lai in 1968.