Bishop Walsh was notified about allegations against Fr Omega by the inquiry in 2004.
The priest met with the Bishop and confirmed that he had conducted sex education classes in a manner that was deemed inappropriate by the school in which he was a teacher. He had shown what were considered inappropriate pictures to the children in his class.
Bishop Comiskey arranged for him to attend a psychiatrist after the school incident, but the report says there is no record on file of this having occurred.
There were later questions over his behaviour in relation to a boy who was missing school. Gardaí interviewed the boy's mother and she was satisfied that nothing inappropriate had happened with the priest.
It was recommended that Fr Omega be assessed and he has had a preliminary assessment and has stopped all involvement in the parish pending recommendations of the assessment and the views of the advisory panel.
The inquiry said that in the absence of information relating to any psychiatric assessment, it was unable to comment on the appropriateness of Bishop Comiskey's response in permitting the priest to remain in active ministry.