"Policies, practices and procedures in place at the time were sufficient, had they been followed, to have prevented Mr McGuire's death," the report said.
The IPCA's chairwoman Justice Lowell Goddard said the police had a duty of care toward Mr McGuire which was not fulfilled.
"Had Mr McGuire been searched, assessed for risk, and monitored in accordance with policy, he would not have had the opportunity to commit suicide in the manner that he did."
In its report, the IPCA concluded police:
* Failed to comply with police policy in not searching Mr McGuire when he was taken into custody;
* Did not manage him correctly following his arrest and detention;
* Did not comply with policy in relation to mandatory inspection requirements.
The IPCA said supervision of the custody officers - both of whom had only around six weeks' experience - at the station was inadequate and watchhouse and custody areas were not appropriately staffed and supervised.
The report also found police had made a reasonable effort to contact a lawyer for Mr McGuire (four were called but none reached), and medical assistance provided by staff after he was found was "immediate and appropriate, albeit too late".
Justice Goddard said omissions by several officers to perform their duties in accordance with police policies, practices and procedures were "unjustified and undesirable".
"In addition, the environment in which officers were working at the time of Mr McGuire's death, in particular the lack of adequate supervision of custody officers, contributed to a situation in which Mr McGuire was able to commit suicide."
The IPCA noted a new police custody facility has since opened at Rotorua and the level of supervision had been improved.
"Policies, practices and procedures in place at the time were sufficient, had they been followed, to have prevented Mr McGuire's death.
"The authority recognises that police have taken disciplinary action against the officers, and also sought independent legal advice as to whether there was any criminal liability on the part of the officers involved."
On the basis of the police's response to the incident the IPCA said it had decided to make no further recommendations.
Rotorua area commander Inspector Bruce Horne acknowledged there were "a number of lapses in our procedures in this case".
"This was a tragic death, and extremely upsetting for Mr McGuire's partner, family and friends, as well as for police and custodial staff," Mr Horne said.
He said the new custodial facility had been designed to improve both the safety of prisoners and staff alike, with a greater level of supervision and staffing, with a sole focus on prisoner management.
Prisoners are monitored constantly by line of sight, documentation is now completed electronically and two separate searches of prisoners are undertaken by staff.
