The Independent Police Complaints Commission has severely criticised the National Black Police Association for “shockingly poor” book keeping.
The IPCC said holes in accounting records made it impossible to account for “significant” sums of money.
However, its report said that problems were more likely due to “administrative failure than dishonesty”.
The NBPA welcomed the report and said that it now had “robust” systems in place for handling financial matters.
IPCC Commissioner Naseem Malik was also critical of some members of the association for a “lack of cooperation” in her investigation which she said had delayed her work.
Ms Malik found that NBPA staff had incurred “personal expenditure” against the charity’s funds and off-set money they needed to repay against future expenses.
Examples included spending by a member on holiday in Zimbabwe and payment for personal calls on NBPA mobile phones.
Of “particular” concern were 330 transactions totalling £115,000 involving cheques from the NBPA and its bank debit card.
In a statement, the NBPA said it was satisfied that “all parties subject” to the investigation “had now been exonerated”.
Ms Malik’s investigation followed a probe into allegations against police and staff working for the NBPA between 2003 and 2005.