The spyware — called Spector 360 — prompted a complaint from the Saanich Mayor Richard Atwell earlier this year, when he alleged the software was being used to spy on him.
The report did not find the mayor's computer was targeted.
"I find that on the balance of probabilities, and considering all of the circumstances, the evidence does not support a claim that the mayor's computer was targeted," said Andy Sinclair, the report's author and Saanich's Chief Administrative Officer.
Sinclair found there was a lack in awareness around privacy and information gathering "in the culture of the District."
"The decision to move up a scheduled security upgrade was done quickly, and that resulted in several missed opportunities to look closer at the Privacy implications of that type of software being installed."
"It is not surprising that some of the persons who made wrong decisions believe they made the right decision. This was the perfect storm."
Sinclair said the program has been removed from all district computers and a new, safer program is currently being sought.