In a long-awaited report, the panel described a breakdown in UN leadership on the ground in Bangui followed by missteps by senior officials in Geneva and New York after the allegations were leaked.
"The end result was a gross institutional failure to respond to the allegations in a meaningful way," said the hard-hitting report by the three-member panel led by Canadian judge Marie Deschamps.
UN Secretary-General Ban Ki-moon said he accepted the findings of the panel set up following a furor over allegations that French troops had forced children to perform sexual acts in exchange for food at a camp near Bangui, from December 2013 to June 2014.
"The manner in which UN agencies responded to the allegations was seriously flawed" the report said.
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"Information about the allegations was passed from desk to desk, inbox to inbox, across multiple UN offices, with no one willing to take responsibility to address the serious human rights violations."
The report singled out the former UN mission chief in CAR as well as officials from the UN human rights office and the children's agency UNICEF in Bangui for failing to report the claims to their superiors or taking steps to help the children.
The head of the UN peace mission, Babacar Gaye of Senegal, was fired in August over his handling of the allegations.
Two of the three officials who were found to have abused their office have left their posts, including Gaye. The third official is still working at the UN mission in Bangui, although not as a human rights officer.
"Given the gravity of these findings, I will act quickly to determine what action might be necessary," said Ban.
While the panel concluded there was no abuse of office by those senior officials, it said the head of the internal oversight office who has since retired, Carman Lapointe, "failed to meet her duty" to carefully review the facts before launching an investigation.