A comprehensive restructuring of the Garda, with changes in working hours, the promotions system and the responsibilities of officers is recommended in the SMI report.
The way gardai are currently rostered for work results in "the availability of an excessive number of gardai on duty at times of least activity", the report says.
Station opening hours should also be reviewed.
Some powers of senior officers should be devolved down through the organisation, it says.
"Authority, responsibility and accountability should be devolved to the lowest possible level consistent with the effective discharge of the functions of the Garda Siochana."
While the Garda has a high rate of crime detection compared with other countries, the report notes that the force has many other responsibilities. It must publicly restate its aims, the report says.
"It is reasonable to expect that the members of the community know specifically what they can expect from the Garda Siochana."
Promotions to senior positions should also be made more transparent, and training should be reviewed by an external agency to ensure it meets the force's needs.
The promotion system is described as "cumbersome and inefficient" as well as costly. About one-fifth of the Garda's 11,000 members seek promotion every year, and arranging their tests and interviews cost more than £600,000 in 1994 alone.
"New systems should be developed which are more effective, consume less resources and use the most up-to-date techniques of selection."
The system for appointing assistant commissioners is deemed "insufficiently transparent" and the report suggests competitive interviews for the post, open to all chief superintendents.
The review group says it considered whether there should be a "cadet" system for recruiting graduates to the force, but decided this was not yet needed, "in view of the calibre of candidates presenting for appointment".
The Garda Commissioner should be able to influence the recruitment policies in the force, including the number of officers sought. He should also have increased responsibility for the Garda's spending.
But there must also be a system for quick communication between him and the Minister for Justice, so that the Minister can keep the Dail and Government informed.
"Appropriate mechanisms must be agreed and put in place to provide the Minister with the immediacy and quality of contact necessary to maintain democratic accountability."
The report says the record systems in the criminal justice agencies such as the Garda, courts and prisons "are in urgent need of renewal". They are mainly paperbased and a "central database on criminals and crime" is needed.
To clear the way for implementation of the report, the Minister for Justice, Mr O'Donoghue, has signalled to Garda associations that the Government is willing to offer a pay increase.
However, the largest group, the Garda Representative Association, is resisting his plan to include the ICTU in a pay review.