SAN JOSE — A new Justice Department audit report chides the San Jose Police Department for sloppily tracking or “improperly” sitting on hundreds of thousands of dollars in federal funds, including tens of thousands in expenditures that couldn’t be readily accounted for.

Though the report released Thursday does not accuse SJPD of breaking any law, it contends the department did not have separate accounting for its use of DOJ “equitable sharing revenue.” That is money generated when a local law-enforcement agency participates in an investigation that results in a federal asset forfeiture, like an illegal gambling crackdown that ends up being prosecuted in federal court.

The report found that the department allowed “commingling” between the federal funds and other revenue sources, making it difficult or in some cases impossible to accurately report how much of the money was being used.

“Based on our audit work, we determined that the SJPD did not have sufficient internal controls and lacked formal policies and procedures to properly account for and manage the use of DOJ equitable sharing funds,” the agency’s Office of the Inspector General stated.

The amount of money reviewed by the audit — $569,461 between 2012 and 2015 — accounts for less than 0.05 percent of the annual police department budget, which was a shade over $344 million for the current fiscal year ending Friday.

Police Chief Eddie Garcia was conciliatory about the audit, chalking it up to accounting and procurement discrepancies that he pledged will be remedied in compliance with the DOJ’s recommendations.

“There was no misappropriation of funds, no fraud, no missing revenue. Having said that, everyone in this department is held accountable,” Garcia said. “When these audits come in, we absolutely want to get better as an organization. I applaud the DOJ for doing this audit. We welcome this information.”

Additionally, the report found the department improperly invested some of the federal funds in stocks, bonds and marketable securities, and says that in one 10-year stretch, over $1.2 million went unused — presumably to save for the purchase a new police helicopter — instead of being spent more expediently in accordance with the aims of the equitable sharing program.

“We found that the SJPD was not in compliance” with a requirement “that prohibited agencies from retaining equitable sharing funds unnecessarily,” the report said.

Other issues included the use of the federal funds to pay for gift cards for two of the department’s recent gun-buyback events. Auditors found the process used to collect the guns was not methodical enough to make clear which weapons were being obtained with the federal funds, making any accounting an estimate at best.

The audit also faulted the department for being late in submitting some spending reports, and for placing the money into the city’s general fund where it drew investment income in violation of the funding agreement.

The Office of the Inspector General made 13 recommendations to the police department to shore up its accounting of the funds, 12 of which SJPD agreed with and promised remedies in a response letter.

The two parties stalemated over the use of $33,390 to purchase window coverings for the South San Jose police substation, with the audit asserting a conflict of interest with a vendor who had a personal connection to a city employee. The department disagreed, arguing that the affiliation did not have any bearing on the procurement of the window coverings.

Otherwise, the proposed remedies include clear separation and accounting for the equitable sharing funds. Police attributed the helicopter purchase delay to budget cuts that grounded the helo unit, but stated burgeoning plans to get to the chopper.

“No organization is perfect, and this makes us get better,” Garcia said. “My staff that works in finance works extremely hard and extremely diligent, but they’re not perfect either, and this gives us areas to tighten up on.”

Garcia added: “The steps that we are taking to address these issues, the DOJ is in agreement that this is the right direction to go.”