Lord Geidt, the prime minister's adviser on standards, found he had "unwisely" allowed work to go ahead without "more rigorous regard" for how it would be paid for.
He found that a Tory donor had settled an invoice for some of the costs but accepted that Mr Johnson was unaware of this.
It meant no conflict of interest had arisen, he said.
“At that point, the Prime Minister immediately sought the necessary advice about his interests and, as a consequence, settled the full amount himself on March 8 2021.”
Lord Geidt added: “It is clear from the record that while a serious and genuine endeavour, the (Downing Street) Trust was not subjected to a scheme of rigorous project management by officials.
“Given the level of the Prime Minister’s expectations for the trust to deliver on the objects he had set, this was a significant failing.
“Instead, the Prime Minister – unwisely, in my view – allowed the refurbishment of the apartment at No 11 Downing Street to proceed without more rigorous regard for how this would be funded.”
Lord Geidt said it was Conservative donor Lord Brownlow who settled an invoice for work on the No 11 flat, a bill reported to be £200,000.
Mr Johnson did have access to £30,000 worth of public funds for renovation work, understood to have been carried out by designer Lulu Lytle. But the bill is understood to have far exceeded that amount.
There had been discussions about a Downing Street Trust being set up to pay for the work, before legal advice received in June 2020 “raised doubts” about whether such a body “would be capable of dealing with costs associated with the private residences”, said the adviser.
Lord Geidt said in his report: “By the late autumn of 2020, it was apparent that a trust capable of meeting the original objects (including the costs of refurbishing the No 11 Downing Street residence) was still likely to be many months off.
“On October 20 2020, Lord Brownlow confirmed to Cabinet Office officials, including by subsequently ensuring that the minutes properly recorded the fact, that he had the day before settled an invoice for the No 11 Downing Street residence refurbishment works directly with the supplier.
“Cabinet Office officials appear not to have acted on this information to the extent of informing the Prime Minister, let alone offering him advice on his private interests.
“Moreover, despite the Prime Minister and Lord Brownlow having some limited contact during the following three months, the record shows no evidence that the Prime Minister had been informed by Lord Brownlow that he had personally settled the total costs.”
A No 10 spokesman said Lord Geidt’s report showed Boris Johnson had adhered to the ministerial code “at all times”.
In a statement, the Downing Street spokesman said: “Lord Geidt’s independent report shows the Prime Minister acted in accordance with the ministerial code at all times.
“The Prime Minister has made a declaration in his list of ministerial interests, as advised by Lord Geidt.
“Cabinet Office officials were engaged and informed throughout, and official advice was followed.
“Other than works funded through the annual allowance, the costs of the wider refurbishment of the flat are not being financed by taxpayers and have been settled by the Prime Minister personally.”