The findings by Police Ombudsman Marie Anderson came following an investigation into the murder of Damien Walsh in 1993.
The 17-year-old was shot dead at the Dairy Farm complex on March 25 by members of the UDA/UFF. The complex was under security force surveillance at the time.
No-one has been charged or convicted in relation to the attack.
Mrs Anderson said her office found no evidence that police were actively involved, had advance knowledge of the attack, or could have stopped the gunmen before the murder.
However, she said police failed to capitalise on a series of significant investigative opportunities, including failing to arrest suspects, not conducting searches of their homes and failing to ensure that important forensic inquiries were undertaken.
Mrs Anderson also identified “collusive police behaviours” such as failing to share important intelligence with the senior investigating officer (SIO) leading the murder investigation, and failing to advise him that the complex had been under security force surveillance.
The findings are set out in a 108-page report which deals with the issues raised by Marian Walsh, Damien’s mother, who expressed concerns about the police investigation and alleged collusion between police and the murderers.
Mrs Anderson found that Mr Walsh was “the innocent victim of a campaign of terror mounted by Loyalist paramilitaries against the Nationalist community”.
“The UDA/UFF alone were responsible for Damien’s murder. However, I have identified investigative failings and gaps as well as collusive behaviours by police which I believe failed both Damien and his family,” she said.
The original police investigation was carried out by the RUC which has since been replaced by the PSNI.