The civil servant said there was “excessive alcohol consumption” by some who attended the event, which took place as England was emerging from a strict lockdown.
Ms Gray’s report - published on Wednesday - is the clearest look at events that took place in No 10 and the Cabinet Office during Covid restrictions.
Among these is a leaving do for a No 10 private secretary held on 18 June 2020. At the time, two or more people were banned from meeting indoors at the time, with an exception allowed gatherings that were “reasonably necessary” for “work purposes”.
Ms Gray said it started in No 10, where leaving speeches were given and “some alcohol” was involved.
After an hour, she said it moved to 70 Whitehall with “alcohol, food and music”.
She said the second part of the leaving do started around 7.40pm and lasted “for a number of hours”.
“There was excessive alcohol consumption by some individuals. One individual was sick. There was a minor altercation between two other individuals.”
Ms Gray said the event broke up “in stages” with a few members of staff leaving from around 9pm. The final member of staff, who stayed to tidy up, left at 3.13am, she said.
The civil servant also looked at a party that took place on the eve of Prince Philip’s funeral, finding some individuals stayed on to carry on drinking alcohol “until the early hours”.
Overall, Ms Gray said there was a “serious failure” to abide by “standards expected of the entire British population” during the Covid pandemic.
“Some of the events should not have been allowed to take place. Other events should not have been allowed to develop as they did,” she said.
Ms Gray published a heavily-redacted “update” to her inquiry in January while the Metropolitan Police carried out its investigation into events held at No 10 and Whitehall during the Covid pandemic. The police probe resulted in 126 fines, including to the prime minister and chancellor.
Her full report includes a series of photos of events - all of which involve Boris Johnson.
The UK prime minister will make a Commons statement later on Wednesday, then hold a press conference to apologise directly to the public.