The Welsh Assembly has condemned mismanagement at the North East Wales Institute of Higher Education following The THES's report last month that staff were being harassed and bullied.
The Welsh funding council audit service has made 31 recommendations for improvements following its investigation into "serious and wide-ranging" allegations of mismanagement at the Wrexham-based institute.
The investigation was set up earlier this year after the intervention of the Welsh secretary for education and training, Tom Middlehurst, following complaints from staff and students.
The assembly will not publish the auditors' report because it was concerned it might prejudice the outcome of two employment tribunal complaints and an internal grievance case against NEWI. But an assembly spokeswoman confirmed that bullying and harassment allegations had been substantiated.
She said: "The audit team found no instances of financial impropriety or misuse of public funds. However, the investigation did substantiate many of the allegations made concerning human resource policy and procedures. Thirty-one recommendations have been put to the governing body by the auditors, and a follow-up visit will be made later this year."
The THES revealed last month that an MA research project into NEWI's personnel policies, by NEWI's senior personnel officer, Colin Grethe, had found serious problems.
Mr Grethe's report said: "My research clearly identifies a variety of practices within NEWI that result in stress for a large number of staff."
Lecturers' union Natfhe passed an overwhelming vote of no confidence in principal John O. Williams earlier this year. He took early retirement on the grounds of ill-health at the end of last month.
NEWI chair of governors John Troth said that allegations of financial mismanagement and academic irregularities had not been substantiated, but he confirmed that allegations of harassment and bullying had been "substantiated in some cases" and that allegations of "procedural and policy weaknesses in the human resource management area" had also been partially substantiated.
"We are disappointed with the areas of weakness identified and are confident that we can work together with our staff to achieve the required changes in a spirit of teamwork and cooperation," he said. The board has fully endorsed a course of action to implement the auditor's recommendations, he said, and an increase in NEWI's annual funding allocation would help build for the future.