The military investigation found that no Marine officer questioned the original account of the deaths despite evidence that it was false, CBS News said.
US Marines are accused of shooting dead up to 24 people - including women and children - in their homes after a colleague was killed in a roadside bomb attack on November 19 last year.
Initial reports claimed the Iraqis had died in a roadside bombing.
The military said earlier on Friday that General George Casey, the top US commander in Iraq, had been sent a report on whether there was a cover-up of Marines' involvement in the killings. The findings of the report have not been released.
The report is separate from a Naval Criminal Investigative Service investigation that US politicians have said could lead to charges of premeditated murder.
CBS said the report found there was no effort to correct an inaccurate US military press release, which repeated the false report that the civilians were killed by a roadside bomb when in fact they were all killed by gunshot wounds.
The payment by one Marine officer of $38,000 in compensation to the victims' families was further clear evidence that the original report was wrong, CBS quoted the investigation as saying.
A US military official in Baghdad said the report found there was room for improvement in areas "from reporting, to training to the command environment" but stressed the report was "purely administrative" and not a basis for criminal proceedings.
The Marine Corps has instructed commanders to keep documents related to the killing of Iraqi civilians in Haditha and Hamdania, both in the western Anbar province, because Congress is likely to hold hearings and request the information, according to a memo obtained by Reuters.
Seven Marines and a Navy medic have been charged with premeditated murder and other crimes over the killing of an Iraqi civilian in Hamdania, a village west of Baghdad, in April.
The memo tells commanders to keep documents and email messages about the incidents, "their planning, execution and subsequent reporting and any documents referring to any aspect of them."
The Iraqi government is carrying out its own investigation into the killings.