The chief constable told MLAs the Police Service (PSNI) should have paid more attention to the spirit of the Patten Report when it came to the rehiring of retired police officers, on 10 October 2012.
Matt Baggott was giving evidence at a meeting of the Public Accounts Committee examining the rehiring of retired officers.
An Audit Office report into PSNI policy on the use of agency staff said the practice was "out of control" in 2007.
Mr Baggott accepted the process had been "running away" and said the PSNI should have exerted greater central control.
"We accept that the corporate grip could have been greater," he explained.
Committee deputy-chairman John Dallat raised the issue of a what he called "revolving door syndrome".
Deputy Chief Constable Judith Gillespie defended the practice, under certain circumstances, of a police officer retiring on a Friday and returning to a job with the PSNI on Monday.
"In some cases it was entirely justifiable," she said.
Ms Gillespie said policies on hiring temporary staff had changed since January 2011.
She explained that in the past local commanders had the authority to engage temporary staff.