Chief inspector to the UKBA, John Vine, said many visas were incorrectly rejected after employees "disregarded or misinterpreted" evidence.
Some applicants were being refused for failing to provide information that had not been originally requested, he said.
The agency said it took the findings "seriously" and would improve training.
Mr Vine's inspection ran between May and July 2011, examining the applications handled at four UKBA posts in South Africa, Nigeria, Kenya and Croydon, south London - which deals with Algerian-based applications.
And in a review of 135 visa applications from Nigeria, his report found the UKBA had made a "serious error" after 14 cases had accidentally received "indefinite leave to enter the UK" - rather than the usual 27-month limit.
In some cases, it found UKBA staff had failed to retain documents backing up their decisions.
Various reasons for visa rejections were listed in the report. In one case, an applicant wishing to visit his uncle in the UK was turned down because they had different family names.
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