Despite having served federal time for the violent sex attack of a woman in Reno, Garrido was mistakenly deemed "low risk" when he should have been classified as a dangerous offender.
Even then, the corrections department didn't do a very good job.
"We determined that Garrido was only properly supervised 12 out of the 123 months it supervised him, a failure rate of about 90 percent," said California Inspector General David Shaw.
The report also attacked the department's use of GPS monitoring, often touted by Governor Arnold Schwarzenegger and prison officials as being effective.
On any given night, Shaw says, anyone could have seen that Garrido was spending an extraordinary amount of time in his yard, later identified as a secret compound.
That's where police say Dugard and her two daughters fathered by Garrido were held captive for nearly two decades.
And there were more than 300 other GPS alerts to parole agents between June 2008 and April 2009.
"System records show that parole agents ignored 276 of these alerts altogether. Parole agents acknowledged 59 of the alerts but apparently took no action," said Shaw.
Shaw says Dugard could have been discovered much earlier than Garrido's August arrest.
Missed opportunities include failing to see utility wires running from the Garrido home to the secret lair; to investigate why a 12-year-old girl was there during a parole agent's home visit; to respond to questions from neighbors and local law enforcement; and to follow up on parole violations.
The department acknowledged its shortcomings and apologized to Dugard.
"The point going forward is how do we get better to uncover this situation, should it ever happen again," said Matthew Cate of California Corrections Safety.
The inspector general recommends improvements like better training of parole agents and better risk assessments of parolees. The correction secretary says a new law to take effect in January will lighten the case load of parole agents giving them the ability to supervise better.