Key failings in financial control, curriculum management, student attainment and leadership were highlighted after Weymouth College's inspection by the Office for Standards in Education.
The concerns were revealed in FE Focus last month, before the Ofsted report was made public.
While some courses, including business studies, IT and English, were well-managed, many suffered from a failure to set targets for retention and pass rates and a lack of efficient management.
Sue Moore, who has been principal at Weymouth since April last year, has introduced "Weyforward" - a 14-point action plan which imposes new financial controls, management structures and curriculum management changes.
Ofsted found the college had suffered from poor leadership and management which had left it in a financial crisis, but praises the "clear and decisive leadership" of Ms Moore since her appointment.
She had taken over a college in an "extremely poor" state, said the report.
Ms Moore said: "The Ofsted report has highlighted many of the significant areas for development that we have already identified and, as such, they were entirely justified and predictable.
"Underpinning Weyforward is a priority objective to strengthen the college's financial position and, within five years, to achieve sufficient reserves to invest in the college's infrastructure. Internal reviews and audits have all reinforced the need for change in service provision and management."
Despite its difficulties, the college received praise in key areas.
Inspectors singled out high A-level science pass rates and retention. They also commended an "outstanding" 100 per cent A-level maths pass rate, although students in this subject achieved, on average, one grade below what was predicted for them. Other strengths included high-quality teaching of students with learning difficulties.