The Humanitarian Quality Assurance Initiative (HQAI) claimed The Catholic Agency For Overseas Development (CAFOD) lacks the proper policies to handle serious complaints against its staff.
The £50-million pound-a-year charity scored zero out of a possible five points for its handling of complaints.
CAFOD confirmed it sacked two staff members in Ethiopia after allegations of sexual misconduct with a boy.
In a statement CAFOD Director Chris Bain said: "We are passionate about protecting as well as serving the poorest communities overseas.
"CAFOD requested the independent HQAI audit to hold ourselves fully accountable. We were very disappointed that it found gaps in how we welcome and address complaints from overseas communities, and we will do better.
"By shining a light into all areas of our work and taking action, we are a stronger and more accountable organisation, upholding our commitment and passion to improve the lives of the poorest and most vulnerable people."
Another aid worker implicated in the Oxfam sexual abuse scandal following the 2010 earthquake in Haiti, was also sacked earlier this year.
The charity said it had already undertaken actions in the last six months to rectify its safeguarding including refresher training for all staff to raise awareness of expectations, policies and processes on safeguarding, complaints handling and reporting.
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