Amnesty for Met credit card abuse
The Metropolitan Police Authority found 1,183 Met employees used the American Express cards for personal spending.
They were given "training and guidance" instead of punishment.
But Metropolitan Police Authority (MPA) member Jenny Jones said training was "not enough" and called for disciplinary action to be taken.
The MPA audit found that one in three of the 3,533 Met officers and staff issued with corporate credit cards misused them.
At one point £3.7m of public money was unaccounted for.
The majority of this money was paid back but legal action is expected against two officers who owe £82,000 and £1,100.
People who made "potentially unacceptable" use of the credit cards, including cases of suspected fraud, were labelled "category A" by the MPA and passed to anti-corruption detectives.
The 1,183 people who misused a card but did not break the law were labelled "category B".
These included officers and staff who purchased personal items and later repaid the money or bought equipment that should have been purchased by other means.
The internal MPA document stated: "It was agreed between all interested parties that due to the volume of files involved, those officers that are deemed to have category B files would receive no formal discipline sanction for their card use, but would receive 'training and guidance' with regards their use."
But Ms Jones said: "I find it unacceptable that the police have just let these officers go with guidance.
"They must have known what they were doing was wrong."
She added: "Having police who do not obey the rules is damaging for public confidence in the Met because you ask: 'What other rules do they break?'"
A Met spokesman declined to comment.
A spokeswoman for the Independent Police Complaints Commission (IPCC) said: "The IPCC agreed with the Met that any cases where there were possible misconduct or criminal offences committed would be referred to the IPCC, all other cases would be dealt with locally by the Met."
Fifty cases of Met credit card misuse have been referred to the IPCC so far, she added.
"Of those, three officers have been convicted, two are awaiting trial, 14 have been given written warnings, one has received words of advice, one has received a formal reprimand and two are awaiting misconduct hearings."
The Met has introduced a new Barclaycard corporate credit card system with tighter spending controls.
Inquiries into corporate credit card use by Met officers and staff are expected to continue until March 2010.