And:Varnish was dropped from the Olympic team last April. She claimed former Technical Director Shane Sutton had told her to "move on and go and have a baby," a claim that Sutton has denied, although an internal investigation by BC upheld allegations of sexism against the Australian.
However, the independent panel found the report was "sanitised" by the board with "harder-hitting investigative findings" by grievance officer, Alex Russell, excluded from the final version.
"The apparently deliberate reversal of the grievance officer’s draft outcome by the British Cycling Board gives every impression of it trying to achieve that aim," says the report. "The actions of the British Cycling Board in that regard are shocking and inexcusable. They also call into serious question whether the composition of the British Cycling Board is fit to govern a national sporting body."
There is further criticism of the board by the review panel the handling of the matter.
"The Panel is also aware that, rather than authorising its appointed grievance officer to come to conclusions following their investigations into the former technical director, the conclusions were to be decided upon by the British Cycling Board collectively," says the draft copy of the review.
The manner in which Varnish was dropped from the programme also came under fire from the panel.
"In the situation involving Jess Varnish, the panel did not find explanations convincing from coaching-staff that she could go from being a border-line Olympian (in fact, potentially an Olympic medallist) to not being good enough… within a week.
"An athlete would have to have been given a warning and also a reasonable period to improve before removal. Varnish was not given a warning or any period of time to improve. She was simply removed."
Former Great Britain cyclist Jess Varnish has appealed against a ruling that saw her lose a landmark employment tribunal.
The 28-year-old failed to prove she was an employee or worker of British Cycling and UK Sport in January.
It meant Varnish was unable to sue for wrongful dismissal and sexual discrimination after being dropped by GB in 2016.
She is challenging the ruling relating to British Cycling.
A judge will now decide whether Varnish's appeal can proceed.