Report blasts poor police response.
The Independent Police Complaints Commission said that allegations were proven against Insp Jeanne Arnold - the Inspector who managed the initial scene - regarding "neglect of duty and disreputable conduct".
The IPCC reviewed the case after Miss Flanagan's parents appealed against the outcome of an internal British Transport Police investigation.
The IPCC branded this inquiry as "poor".
It found "there was a lack of understanding about, and poor application of, operational and investigative principles".
This meant that "the scene was poorly preserved, a scenes of crime officers did not attend until four hours after the event, and the collection, handling, recording and storage of exhibits was poorly undertaken".
It said Birmingham-based BTP CID officers, who had all been allowed the night off for a Christmas party as the tragedy occurred, were "not being effectively managed by their Acting Detective Chief Inspector".
Commissioner Tom Davies said there were failings in BTP's initial response and the murder investigation.