Sheffield Cathedral failed to consult stakeholders before dismissing its entire choir last July.
A review by the Bishop of Sheffield found a culture of bullying at the institution, poor human resources practices, and "some real confusion about the purpose and function" of a review of its music department.
It says disbanding the choir without proper communication affected the mental health and faith of the young people involved.
"This failure, together with the failure to deliver a clear and consistent message about the reasons for the decision, compounded the reputational and relational hurt."
The report said the Cathedral Chapter should "give serious consideration" to apologising to the choristers, but stopped short of directing it to do so.
Safeguarding interventions applied to then-Master of Music Joshua Stephens, who resigned in June, were "inappropriate and disproportionate," the report added.